Accounting standards on the right track: KPMG

WHILE a more comprehensive review of the extractive industries (mining, processing and refining) is still pending, the Australian equivalent to IFRS 6 Exploration for and Evaluation of Mineral Resources, has been a success in industry participation in the introduction on the standard.
Accounting standards on the right track: KPMG Accounting standards on the right track: KPMG Accounting standards on the right track: KPMG Accounting standards on the right track: KPMG Accounting standards on the right track: KPMG

The consulting firm said AASB 6 Exploration for and Evaluation of Mineral Resources included Australian specific guidance, mandating the continued use of the “area of interest” concept for Australian companies.

Some key points included the coverage of entities which recognised exploration and evaluation assets must perform impairment tests on those assets when facts and circumstances suggest that the carrying amount may be impaired.

KPMG said AASB 6 was limited to exploration for and evaluation of mineral resources and will not be applicable by analogy to similar activities such as research.

“AASB 6 as finally issued is substantially different to the original exposure draft and we congratulate industry participants for their active participation in the debate around the introduction of this standard and the AASB and IASB for listening to and acting on the needs of industry,” said partner Alison Kitchen.

Kitchen said KPMG had a dedicated national IFRS team in all Australian states to support companies in the resources sector in managing their reporting during this transition period.

The new standards can be accessed at http://www.kpmg.com.au/Portals/0/05FR-001AASB6Exploration.pdf

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