Canada’s move to International Financial Reporting Standards (IFRSs) creates challenges for junior mining companies due to the significant differences in characteristics between exploration companies in their development stages and other types of companies. Chartered Professional Accountants Canada (CPA Canada) joined with other organizations to create non-authoritative guidance on IFRS application issues of relevance to these kinds of companies.

For Viewpoints on junior oil and gas companies, click here.

CPA Canada and the Prospectors and Developers Association of Canada (PDAC) created the Mining Industry Task Force on IFRSs to share views on IFRS application issues of relevance to junior mining companies. The following topics have been addressed by the Task Force:

Accounting for Precious Metal Streaming Arrangements by the Producer

Accounting for Share Purchase Warrants Issued

Asset Acquisition Versus Business Combination

Background on Different Phases of Activities of a Mining Entity

Capitalization of Borrowing Costs

Commencement of Commercial Production

Commodity Prices and Impairment 

Decommissioning Liabilities in Business Combination 

Depletion of a Mine in the Production Phase: Useful Life of the Mine

Exploration and Evaluation Expenditures

Farm-out Arrangements in the Exploration and Evaluation Phase

Flow-Through Shares

Functional Currency

Identifying Levies 

Impairment of Exploration and Evaluation Assets

Recognition of Corporate Social Responsibility Provisions under IAS 37

Redevelopment of an Inactive Mine by an Existing Owner

A complete list of the Mining Viewpoints can be found here

Although the views expressed in these Viewpoints are non-authoritative and have not been formally endorsed by CPA Canada, PDAC or the organizations represented by the task force members, they are generally considered to be best practice. If companies intend on implementing practices that are inconsistent with these Viewpoints, thorough consultation with their auditors should be undertaken.

To contact someone from our Mining & Exploration team click here

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