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The Application of IFRS: Mining
The mining industry continues to be an industry in which global operations are common. The industry is influenced by global and local demand, global economic performance, commodity prices and government policies. Key accounting issues arise from uncertainties associated with exploration and development activities, time lapses between initial investment and production, risk-sharing arrangements that companies enter into, the impact that commodity prices have in relation to operational demands, and the inherent difficulties in estimating long-term forecasts.
Reserves and resources are at the heart of a mining company’s value, and this publication highlights the difficulties that mining companies have in communicating clearly to users the impact that reserves and resources have on their financial reporting, and the significant uncertainties that mining companies face in their operations. However, there are also a number of consistent areas in the survey results, such as the inclusion of additional disclosures on reserves and resources, and the disclosure of production tables and non-GAAP performance measures, that illustrate how the industry is attempting to provide useful information for financial statements users in addition to the requirements of IFRS.
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