TORONTO, March 10 /CNW/ -
What: Consolidation, capital-intensive projects, and geopolitical and
exploratory risks characterize today's global mining landscape.
Now Canada's mining sector is readying itself to add International
Financial Reporting Standards (IFRS) to the mix as the new
Canadian GAAP. IFRS will create significant accounting challenges
in the sector, while opening Canada's capital markets further to
the global economy.
IFRS is the new global accounting language. It's designed to make
global financial reporting clearer by ensuring companies around
the world tell their financial stories in a consistent, directly
Why: Canadian public companies are required to adopt IFRS by 2011.
What's more, the Canadian Securities Administrators have proposed
changes to security rules that could permit early adoption
beginning in 2009 - something some miners might want to consider
to give them a competitive edge. Ernst & Young believes companies
should act now and complete an IFRS diagnostic in 2008. The
diagnostic will help companies assess the specific impact
conversion will have on their businesses and prepare them for
conversion to the new standards.
How: Sector-specific financial reports and business processes reflect
the risks and rewards to which mining companies are exposed. Ernst
& Young believes IFRS conversion will cause accounting challenges
for the mining sector, including:
- Exploration and evaluation costs
- Business combinations
- Impairment of assets
- Joint ventures
- Income taxes
The application of IFRS in these and other areas will have a
material impact on financial reporting. That means analysts,
institutional investors and other key internal and external
stakeholders will need to learn how IFRS will affect financial
statements. An IFRS diagnostic designed to assess the impact of
conversion is the starting point of a company's IFRS journey.
Who: Ernst & Young has significant global experience in helping
companies address the IFRS conversion challenge, as well as
extensive experience helping companies in Canada and around the
world address the issues unique to their business. We can help you
understand the impact of IFRS on your business and help you
develop an effective conversion plan.
About Ernst & Young
Ernst & Young is a global leader in assurance, tax, transaction and
advisory services. Worldwide, our 130,000 people are united by our shared
values and an unwavering commitment to quality. We make a difference by
helping our people, our clients and our wider communities achieve potential.
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