Canada’s move to International Financial Reporting Standards (IFRSs) creates challenges for junior oil and gas 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 mining companies, click here.

CPA Canada and the Canadian Association of Petroleum Producers (CAPP) and the Small Explorers and Producers Association of Canada (SEPAC) created the Oil and Gas Industry Task Force on IFRSs to share views on IFRS application issues of relevance to junior oil and gas companies. The following topics have been addressed by the Task Force:

Accounting for Share Purchase Warrants

Asset Acquisition versus Business Combination

Business Combinations: Acquisition of Control Without a Majority of the Voting Rights

Farm-out Arrangements in Exploration and Evaluation Phase

Flow-Through Shares

Functional Currency

IAS 36 Impairment of Assets – Fair Value Disclosures

IFRS 11 and Direct Working Interests

Identifying Levies

Revising an Existing Decommissioning Liability

Segment Reporting

Significant IFRS Application Issues

A complete list of the oil and gas Viewpoints can be found here

Although the views expressed in these Viewpoints are non-authoritative and have not been formally endorsed by CPA Canada, CAPP, SEPAC 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.

For more information contact Suki Gill, Partner and Oil & Gas Lead, here

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