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- IFRS 6 permits an enti=
ty to
develop an accounting policy for exploration and evaluation assets
without specifically considering the requirements of paragraphs 11=
and
12 of IAS 8 Accounting Policies, Changes in Accounting Estimates a=
nd
Errors. Thus, an entity adopting IFRS 6 may continue to use the
accounting policies applied immediately before adopting the IFRS. =
This
includes continuing to use recognition and measurement practices t=
hat
are part of those accounting policies.
- IFRS 6 requires entiti=
es recognising exploration and evaluation asset=
s to
perform an impairment test on those assets when facts and
circumstances suggest that the carrying amount of the assets may e=
xceed
their recoverable amount.
- IFRS 6 varies the
recognition of impairment from that in IAS 36 Impairment of Assets=
but
measures the impairment in accordance with that Standard once the
impairment is identified.
- IFRS 6 requires disclo=
sure
of information that identifies and explains the amounts recognised in its financial statements arisi=
ng
from the exploration for and evaluation of mineral resources,
including
- (i)
its accounting policies for exploratio=
n and
evaluation expenditures including the recognition of exploration =
and
evaluation assets.
- (ii) the amounts of a=
ssets,
liabilities, income and expense and operating and investing cash
flows arising from the exploration for and evaluation of mineral
resources.
- IFRS 6 is effective for
annual periods beginning on or after 1 January 2006. Earlier
application is encouraged. If an entity adopts IFRS 6 before 1 Jan=
uary
2006, transitional relief is available for some comparative
disclosures.
Special IAS Plus Newsletter
Explaining IFRS 6
On 31
January 2005, Deloitte's IFRS Global Office published a Special Global
Edition of our IAS Plus newsletter explaining IFRS 6 Exploratio=
n for
and Evaluation of Mineral Resources (PDF 54k). =
May 2005: Proposed Small Amendm=
ent to
IFRS 6
At its=
April
2005 meeting, the Board discussed a proposed technical correction to
IFRS1.36B to give effect to the intent of the Board as outlined in BC65=
, to
provide relief from restating comparative information (rather than just
producing comparative disclosures).
After =
some
discussion, the Board concluded that IFRS1.36B did not correctly reflect
the intention of the Board and that the correction should be made. The
Board did not believe this issue warranted an exposure draft therefore,=
it
would proceed as follows:
- Include this issue in =
the
next IASB Update publication, as well as highlight the issu=
e on
the IASB website.
- Consider any reactions=
from
constituents at the next Board meeting.
- Subject to comments
received, the correction would be made to the literature.
The new
paragraph (36B) would be as follows:
36B. An entity that adopts IFRSs
before 1 January 2006 and chooses to adopt IFRS 6 Exploration for and
Evaluation of Mineral Resources before 1 January 2006 need not apply th=
e requirements
of IFRS 6 to comparative information in its first IFRS financial
statements.
On 2 M=
ay
2005, the IASB invited comments on a proposed small amendment to IFRS 6
and, as a consequence, an amendment to IFRS 1 First-time Adoption of
International Financial Reporting Standards. The proposed amendment wou=
ld
clarify that an entity that both (a) adopts IFRSs<=
/span>
for the first time before 1 January 2006 and (b) applies IFRS 6 before =
that
date is exempted not only from providing comparative prior-period discl=
osures
but also from applying the recognition and measurement requirements of =
IFRS
6 in the prior comparative period. The Board hopes to issue the final
amendment before 30 June 2005. Comment deadline is 3 June 2005.
June 2005: Amendments to IFRS 6=
and
IFRS 1 Adopted
On 30 =
June
2005 the IASB issued amendments to IFRS 1 and IFRS 6 to clarify that an
entity that both (a) adopts IFRSs for the f=
irst
time before 1 January 2006 and (b) applies IFRS 6 before that date is
exempted not only from providing comparative prior-period disclosures b=
ut
also from applying the recognition and measurement requirements of IFRS=
6
in the prior comparative period. Click to Download the IASB
Press Release (PDF 48k).
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