International Reporting Standards Research Articles

Estimation algorithms for combined financial instruments: International Reporting Standards

Estimation algorithms for combined financial instruments: International Reporting Standards

Mineral Reporting Standards: PERC’s Role in CRIRSCO and Its Relevance to the European Mining Sector

Modern society is heavily reliant on minerals to support current lifestyles and requires continued investment in the exploration, evaluation, development, and production of mineral raw materials. Potential investors and their advisors require reliable information to support decisions on investments in minerals projects. To address these needs, international guidelines and reporting standards have been developed. The Committee for Mineral Reserves International Reporting Standards (CRIRSCO) is an international association of fifteen regional organisations from around the world, which promotes best standards in international minerals reporting. The Pan-European Reserves and Resources Reporting Committee (PERC), the European member of CRIRSCO, is an association of six Europe-based professional organisations, including the Geological Society of London (GSL). CRIRSCO-aligned reporting standards, such as the PERC Reporting Standard, are based on common principles, rules and guidance, and include sixteen common definitions of key terms. A description of the CRIRSCO International Reporting Template, which provides the basis for the development and periodic updating of individual standards such as the PERC Reporting Standard, is provided. The different elements of the 2019 version of the CRIRSCO Template are described, together with a discussion of changes and additions made in the PERC Reporting Standard 2021 which is based on it. The need for continual development and enhancement of the CRIRSCO-aligned standards to address investor concerns such as the need for information on the environmental, social and governance (ESG) aspects of mineral projects, as well as greater rigour in defining competency requirements, is discussed. Reference is also made to the United Nations Framework Classification for Resources (UNFC) and its relationship with the CRIRSCO-aligned standards, including the proposed use of the UNFC in the European Union’s Critical Raw Materials Act (CRMA) and how the two systems could be used in a complementary manner to support the needs of both governments and investors in mineral companies.

ЕКОЛОГІЧНІ ТА СОЦІАЛЬНІ РИЗИКИ В МІЖНАРОДНИХ ТА ВІТЧИЗНЯНИХ СИСТЕМАХ ОЦІНКИ МІНЕРАЛЬНИХ РЕСУРСІВ

It was defined that the ecological and social risks became key in the implementation of mining projects from the stage of geological study through development till mining operation. The main components of these risks are fixed over the past years, which are related to the problems of water resources management, the processes of decarbonization of production, the reduction of the negative impact on climate change, the environmental friendliness of production and the emissions volumes that are directly or indirectly related to mining enterprises, etc. A comparison of domestic and international standards for the assessment of mineral reserves and resources was carried out according to the basic features of classification with the determination of social and environmental assessment factors. The features of the Classification of Mineral Reserves and Resources of the State Subsoil Fund, the UN Framework Classification, the PRMS Petroleum Resources Management System, the International Reporting Standards of the CRIRSCO Mineral Resources Committee are analyzed and compared in order to find features that allow determining the social and environmental risks of mining projects. The presence of these direct features in the classification systems indicates the orientation of the assessment standards to the comprehensive assessment of projects as such meeting the goals of sustainable development. The social and ecological viability of subsurface and natural resource projects is used as a direct feature only in the UN Framework Classification, while its inclusion took place in 2009 in the part of social factors, and in 2019 – in the part of environmental factors. This classification is considered as a tool for the effective management of national resources, necessary for the realization of the goals of sustainable development, which enables all stakeholders to find a common understanding of the development of resources and territories, to compare projects in different types of resources and subsoil use. In other international standards, as well as in the domestic classification of the State Fund of Subsoil, socio-ecological criteria are taken into account indirectly, which is one of the key areas of development of these mineral resource assessment systems. Such development can take place in two directions: the inclusion of social and ecological criteria directly as basic features, while this is possible both in the form of complex parameters and individual classes/subclasses; use and improvement of existing methods of resource and reserves valuation, taking into account the environmental and social risks of the implementation of subsoil use projects.

Resource potential of mine wastes: A conventional and sustainable perspective on a case study tailings mining project

Mine wastes such as tailings contain minerals that can be valorised. However, their resource potential remains widely misjudged because of non-standardised assessment and classification methods. The current United Nations Framework Classification for Resources (UNFC) concept is tested for its applicability to metalliferous tailings mining projects from a private mining company’s perspective with economic focus on a scoping study level. For the case study tailings storage facility (TSF) Cabeço do Pião (Portugal), a rehabilitation scenario, and two resource recovery scenarios with low and high degree of tailings valorisation are defined and evaluated. A risk assessment shows that actions are necessary to protect human health and the environment. Material flows are modelled and a discounted cash flow analysis, under consideration of mineral price uncertainty, indicates the project’s economic viability. The application of the UNFC principles exemplifies that they cover a broad range of aspects in contrast to the conventional classification principles of the Committee for Mineral Reserves International Reporting Standards (CRIRSCO) which focus on techno-economic aspects: TSF rehabilitation is identified as a necessary base case and positive socio-environmental impacts are prioritised. However, the resource recovery scenarios cannot be differentiated with the current UNFC concept. The evaluation reveals the necessity for a stronger user guidance in the assessment and classification process. Additionally, a more detailed subcategorisation is required to identify a project’s benefits and barriers, particularly in social and environmental domains. These aspects are essential for the further development of the UNFC concept to achieve its full potential.

Aspects of Estimation and Reporting of Mineral Resources of Seabed Polymetallic Nodules: A Contemporaneous Case Study

Exploration of seabed polymetallic nodules identifies the Clarion Clipperton Zone and the Indian Ocean Nodule Field to be of economic interest. Mineral resource estimation is important to the owner of the resource (all of mankind; and managed by the International Seabed Authority; ISA) and to developers (commercial and government groups holding contracts with the ISA). The Committee for Mineral Reserves International Reporting Standards was developed for the land-based minerals industry and adapted in 2015 for ISA-managed nodules. Nodules can be sampled in a meaningful manner using mechanical devices, albeit with minor issues of bias. Grade and moisture content are measured using the established methodology for land-based minerals. Tonnage of resource is determined via the abundance of nodules in kilograms per square metre of seabed. This can be estimated from physical samples and, in some cases, from photographs. Contemporary resource reporting for nodules classify the level of confidence in the estimate, by considering deposit geology, sample geostatistics, etc. The reporting of estimates also addresses reasonable prospects for eventual economic extraction, including factors such as mining technology, the marine environment, metallurgical processing, and metals markets. Other requirements are qualified persons responsible for estimation and reporting, site inspection, and sample chain of custody.

Information Value of the Segment Reporting in the Polish Energy Sector

Abstract Conventional energy sources dominate in the Polish energy sector, which is a huge risk to meeting environmental protection requirements. Polish energy companies are facing challenges related to meeting the requirements of the European Union and the National Energy Policy. The paper attempts to answer the question whether the ongoing discussion on the future of the energy sector, dealing with such issues as development of renewable energy sources is reflected in the annual financial reports of companies listed on the Warsaw Stock Exchange and covered by the WIG_ENERGY index. This study contributes to the extant literature on financial disclosures in several ways. First, the examination of compliance of segment reporting of selected companies listed on the Polish stock exchange with International Reporting Standards (IFRS) was carried out (particularly IFRS 8 – Operating Segments). Second, the information value of disclosures for investors in the energy industry was assessed. The empirical part was preceded by a description of segment reporting principles in accordance with IFRS 8 and the summary of challenges facing the energy sector in Poland.

Future trends in the international Reporting Codes based on SEC's Regulations SK-1300

SYNOPSIS In June 2016, the US Securities and Exchange Commission (SEC) 'proposed a revision to its disclosure requirements-related guidance under the Securities Act and Exchange Act for properties owned or operated by mining companies'. On 31 October 2018, the SEC released its adopted final rules for property disclosures for mining registrants - 'Modernization of Property Disclosures for Mining Registrants'. The amendments are aimed at providing investors with a more comprehensive understanding of a registrant's mining properties, which should help them make more informed investment decisions. The new rules replace the SEC's Industry Guide 7 as of January 1, 2021. This paper investigates how the new subpart 1300 of Regulation S-K may affect future updates to the Committee for Mineral Reserves International Reporting Standards (CRIRSCO) International Reporting Template, as well as international Reporting Codes. Critical changes such as the reporting of Mineral Resources exclusive of Mineral Reserves are discussed, the impact of third-party reporting regarding reducing Section 11 liability is considered, as is the trend of utilizing multiple qualified persons for technical reports. This paper highlights areas in the CRIRSCO and international Reporting Codes that may require consideration by Qualified and Competent Persons providing technical report summaries and Competent Persons Reports (CPRs). Keywords: SEC, 1300 of Regulation S-K, international Reporting Codes, CRIRSCO, Qualified/Competent Person, mineral reporting.

Evaluation of secondary diamond (and gemstone) deposits according to the SAMREC Code

SYNOPSIS Alluvial diamond and other gemstone deposits have, typically, been exploited by small artisanal operations with little or no geological control. Over the last decade, however, alluvial deposits have become more interesting to larger (often listed), mid-tier companies wishing to benefit from the higher incomes generated by high-quality stones. The difficulties associated with evaluation and valuation of such alluvial diamond/gemstone deposits are widely known but, regrettably, often not widely understood - leading to several misconceptions over what can and cannot be expected from such deposits. Fortunately, there is a reasonably well-established body of knowledge on alluvial diamonds that has resulted in accepted industry-standard practices of how to evaluate these deposits. The 2016 version of the SAMREC Code includes several sections specific to the requirements of secondary diamond and gemstone deposits, both alluvial and marine. Consequently, it is possible to define Diamond/Gemstone Resources in accordance with the major international Committee for Mineral Reserves International Reporting Standards (CRIRSCO) type codes. This paper outlines some of the requirements and some of the pitfalls that need to be appreciated while estimating Diamond/Gemstone Resources and/or Reserves on such deposits. Keywords: Reporting Codes, SAMREC, alluvial diamonds, gemstones, Resources, Reserves.

Understanding Geologic Uncertainty in Mining Studies

Editor’s note: The Geology and Mining series, edited by Dan Wood and Jeffrey Hedenquist, is designed to introduce early-career professionals and students to a variety of topics in mineral exploration, development, and mining, in order to provide insight into the many ways in which geoscientists contribute to the mineral industry. Abstract The role of geology in advanced mining studies, such as feasibility studies, is commonly dwarfed by the technical inputs from mining, metallurgical, and social license issues. Understanding and planning for geologic risk in the feasibility process is often overlooked for the higher-profile aspects required to establish an ore reserve. If the geologic model of a deposit cannot be reliably forecast, then there will be lower confidence in many of the modifying factors (which include mining, processing, environmental, social, governmental, and economic factors that influence the conversion of identified mineral resources into economic reserves). Understanding geologic risk requires characterization of all the chemical, physical, and spatial properties of mineralization and waste that form part of the mined material. It is essential to understand the scope of the professionals who use geoscientific data in order to assist the outcomes of the study, with the data types first identified, then collected in a comprehensive manner, and finally interpreted at the appropriate time to contribute to the outcomes of the study. If the study is not comprehensive, remedial collection of data is required at a cost to development timeline and budget; a worse scenario is that the development fails economically after it is built. Developing projects to a construction stage after a mining study typically involves international standards of assessment and verification, although the standards of geoscientific data collection differ between companies and countries. For this reason, recent efforts by international bodies such as the Committee for Mineral Reserves International Reporting Standards (CRIRSCO) are assisting many countries to work toward a standardized terminology in a feasibility study. There are many examples where the mining outcomes have not met the feasibility study forecast, with variable causes for a failure to deliver to plan; geoscientific data shortfalls often contribute significantly to these negative outcomes. Examination of case histories, knowledge of international standards for risk reporting, advances in measurement technology, and an understanding of the end users of geoscientific data will help geologists to better prepare the scope of a feasibility study for a potential mine, in order to deliver a product with lower risk related to geologic uncertainty.

A Case Study Of The Cash Flow Statement: US GAAP Conversion To IFRS

International Reporting Standards (IFRS) has become the required framework for most of the world financial markets effective on January 1, 2011. The United States is in a transformation stage, and it has not yet been determined when the US will adopt IFRS. The introduction of IFRS accounting rules into the curriculum is valuable because it presents an alternative method of accounting which can be used to heighten students understanding of GAAP. At present, the CPA Uniform CPA exam is testing IFRS and its testing content is increasing with each current test. Additionally, the CFA exam tests IFRS exclusively and has eliminated US GAAP from its curriculum, basing its action on the fact that the CFA examination is a global based exam. This case requires students to prepare an IFRS cash Flow Statement from a presented US GAAP presented Statement of Cash Flow, from a given set of facts in the case. This case study can be used at the undergraduate or graduate level. It is most suitable for Intermediate Accounting 2, Accounting Theory, Financial Statement Analysis, and an Accounting Capstone classes. Students must have or develop a solid understanding of both US GAAP and IFRS rules is required to adequately address this cash flow case study.

Depreciation of Non-Temporal Investment<sup>*</sup>

Purpose - This paper compares current requirements for depreciation accounting from the Financial Accounting Standards Board in America for equity securities and all debt securities with determinable fair value, and disclosure requirements related to the fair value of securities below registered cost with the requirements of the international Financial Reporting Standards Board and accounting standards committee. Research design, data, and methodology - Mini-review statements are examined relating to depreciation of investments in America and the Financial Accounting Standards depreciation of investments in Iran that meet the requirements of international reporting standards and the Iranian Accounting Standards Committee. Results - Accounting rules for depreciation of investments in securities requires a good deal of judgment. In particular, devaluation decisions during the recession and market crisis were controversial, although even with no clear guidelines on devaluation, sometimes such decisions were simple. Conclusions -Companies can choose from formal policies applied uniformly and documentations of interest to provide a summary of the principles and conclusions obtained through disclosure, enabling market participants to assess the entity's conclusions reasonably, thereby easing investor and market worries.

Wykazywanie zasobów wêgla kamiennego w Polsce zgodnie z JORC Code / Reporting of Hard Coal Reserves and Resources in Poland on the Basis of the JORC Code

Streszczenie Wykazywanie zasobów złóż kopalin oraz podawanie tych informacji do wiedzy publicznej stanowi istotne zagadnienie w odniesieniu do zasadności prowadzenia działalności gospodarczej w branży geologiczno-górniczej. Od szeregu lat w przestrzeni międzynarodowej funkcjonuje system raportowania i klasyfikacji zasobów kopalin stałych bazujący na australijskim kodeksie JORC. Dokument ten, honorowany przez giełdy, przedstawia minimum standardów i wytyczne niezbędne do rzetelnego i wiarygodnego wykazywania zasobów złóż; kodeks JORC stosuje dwie podstawo­we kategorie zasobów: resources i resenres, z których pierwsza odnosi się do zapasów (zasobów bilansowych) kopaliny, a druga do zasobów wydobywalnych - czyli wielkości możliwych do wy­dobycia przy uwzględnieniu aktualnie dostępnych środków technicznych i obecnych kryteriów ekonomicznych. Układ klasyfikacji jest hierarchiczny - zasoby resen/es stanowią podzbiór zapasów. Wraz z napływem informacji geologicznej wśród tych ostatnich wyróżnia się zasoby domniemane (inferred), oznaczone (indicated) oraz zmierzone (measured), natomiast w obrębie pierwszych - zasoby prawdopodobne (probable) i pewne (proved). Zasoby bilansowe zmierzone oraz wy doby walne pewne stanowią najlepiej rozpoznane partie złóż. W związku z sukcesem JORC wiele krajów wprowadziło bazujące na nim własne, narodowe kodeksy wykazywania zasobów. Kodeksy te sku­pione są w obrębie CRIRSCO - Komitecie Międzynarodowych Standardów Wykazywania Zasobów Kopalin [stałych]. Polska klasyfikacja zasobów ma hierarchiczny charakter - z łącznych zasobów geologicznych wyodrębnia się zasoby bilansowe obejmujące zasoby przemysłowe i nieprzemysłowe. W zależności od zakresu wiedzy geologicznej zasoby wykazuje się w pięciu kategoriach rozpoznania: D, C2, Cj, B i A. Po odjęciu strat i uwzględnieniu zubożenia otrzymuje się zasoby eksploatacyjne. Jak do­tychczas, pomimo doświadczeń rosyjskich w tym zakresie, w Polsce nie wypracowano standardu harmonizującego system polski i międzynarodowy. Treść niniejszego artykułu przedstawia pro­pozycję takiego dostosowania.

US GAAP Conversion To IFRS: A Case Study Of The Cash Flow Statement

International Reporting Standards (IFRS) has become the required framework for most of the world financial market economies as of January 1, 2011. This includes, in a non-comprehensive listing, the many European Union countries - Canada, Australia and New Zealand. In the United States, US Generally Accepted Accounting Principles (GAAP) is still required. However, plans are presently in place by the SEC to abandon US GAAP and to adhere to IFRS requirements by as early as for the period ending December 31, 2014. As such, it is important to introduce IFRS accounting rules in the college curriculum and make it a major component of accounting classes. This case study takes a US GAAP Prepared Cash Flow Statement and, based on the facts of the case, requires students to prepare an IFRS-based Cash Flow Statement. The need to understand both US GAAP and IFRS rules is required to adequately address this case study, which is most suitable for an Intermediary Accounting, Accounting Theory and a Financial Statement Analysis class, as well as an Investment Finance course, at the graduate level.

A perspective on global harmonisation of major national mineral asset valuation codes

Companies involved in the minerals industry have been exposed to operating in more than one geographical jurisdiction for over a century. This practice has been amplified in recent decades by globalisation of the world economy. Cross-jurisdictional exposure has required that the way information on mineral assets is reported in the public domain or as industry best practice be standardised in order to provide a common understanding, irrespective of regulatory jurisdiction. Accordingly, a global committee known as the Committee for Mineral Reserves International Reporting Standards (CRIRSCO) was formed in 1994 to align national minerals reporting codes. CRIRSCO initially published a template in 2006 and updated it in May 2013 to align the national mineral reporting codes. The template fosters a common understanding by harmonising the definitions, classification, estimation processes and the public reporting of exploration results, mineral resources and mineral reserves. The standardisation of minerals reporting codes is a foundation from which inputs to subsequent valuations are defined. However, despite the various national valuation codes having adequate high-level commonality on some principles, valuation approaches, competence and application of these codes, there are differences that arise in the areas of definitions, some principles and scope that require alignment. Consequently, the International Mineral Valuation Committee (IMVAL) was formed in 2012 in Australia, primarily to develop a globally acceptable mineral asset valuation (MAV) template by harmonising the valuation codes. This paper contributes to the development of such a template by providing a plausible framework for its development. The framework is premised on a skeletal structure that initially encompasses only high-level commonality among the major valuation codes, while allowing jurisdiction-specific requirements to be addressed at the national level. There is flexibility for the template to evolve over time to include aspects not initially addressed, such as valuation of mineral corporations and their respective securities, and valuation of oil and gas assets.

GAAP vs. IFRS Treatment of Leases and the Impact on Financial Ratios

As of January 1, 2011 most of the world financial market economies are using International Reporting Standards (IFRS) as the required framework for financial statements. A non-comprehensive listing includes the European Union Countries, Canada, Australia and New Zealand. In the United States, US Generally Accepted Accounting Principles (GAAP) is still required but adoption of IFRS has support of many accounting firms and professional organizations and is under consideration by the SEC. This case study focuses on differences in the treatment of leases and the impact of these differences on financial statements and selected financial ratios. Students take GAAP financial statements and prepare an IFRS based balance sheet and income statement. The need to understand both GAAP and IFRS rules regarding leases is required to adequately address this case study. This case study is suitable for use at both the undergraduate and graduate levels. It could be used in an Intermediate Accounting II, Accounting Theory, Financial Statement Analysis or an International Accounting class, as well as an Investment Finance course.

A Comprehensive Case Study: US GAAP Conversion to IFRS

International Reporting Standards (IFRS) has become the required framework for most of the world financial markets effective on January 1, 2011. The United States is in a transformation stage, and it has not yet been determined when the US will adopt IFRS. The introduction of IFRS accounting rules into the curriculum is valuable because it presents an alternative method of accounting which can be used to heighten students understanding of GAAP. At present, the CPA Uniform CPA exam is testing IFRS and its testing content is increasing with each current test. Additionally, the CFA exam tests IFRS exclusively and has eliminated US GAAP from its curriculum, basing its action on the fact that the CFA examination is a global based exam. This case requires students to critically read authoritative accounting literature and apply their understanding in preparing IFRS statements by preparing an IFRS based statements from a US GAAP prepared income statement and balance sheet. This case study can be used at the undergraduate or graduate level. It is most suitable for Intermediate Accounting 2, Accounting Theory, International Accounting, Financial Statement Analysis, or an Accounting Capstone classes. Students must have or develop a solid understanding of both US GAAP and IFRS rules is required to adequately address this comprehensive case study.

US GAAP Conversion To IFRS: A Case Study Of The Balance Sheet

International Reporting Standards (IFRS) has become the required framework for most of the world financial market economies. In the United States, US Generally Accepted Accounting Principles (GAAP) is still required. However, plans are presently in place by the SEC to abandon US GAAP and to adhere to IFRS requirements by as early as the period ending December 31, 2014. This case study requires the student to transform a US GAAP presented Balance Sheet to IFRS and is most suitable for an Intermediary Accounting 11 and a Financial Analysis class at the graduate level.

US GAAP Conversion To IFRS: A Case Study Of The Income Statement

International Reporting Standards (IFRS) has become the required framework for most of the world financial market economies as of January 1, 2011. In the United States, US Generally Accepted Accounting Principles (GAAP) is still required. However, plans are presently in place by the SEC to abandon US GAAP and to adhere to IFRS requirements by as early as for the period ending December 31, 2014. This case study requires the student to transform a US GAAP presented Income Statement to IFRS. This case study is most suitable for an Intermediary Accounting or a Financial Analysis class at the graduate level.

The Case for the Use of International Reporting Standards in New Zealand: A Briefing Paper Prepared on Behalf of the New Zealand Securities Commission

The objective of this paper is to examine the issues pertinent to the consideration of the proposal made by the Accounting Standards Review Board (ASRB) that New Zealand adopt the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB). The purpose of this examination is to provide input to the New Zealand Securities Commission (the Commission) to assist them in their deliberations on making recommendations on the future development of the financial reporting infrastructure for New Zealand's securities markets. Similar to securities regulators across the world, the Commission has an interest in promoting a strong securities market where the financial reporting framework and its supportive infrastructure results in high quality, transparent and comparable financial reports. There are four identifiable components of the infrastructure that drive the quality of financial reporting in New Zealand.

The Development of Voluntary Cash Flow Statements in Germany and the Influence of International Reporting Standards

This paper studies the incentives of German firms to voluntarily disclose cash flow statements. Although cash flow statements have not been mandatory in Germany until recently, an increasing number of firms have voluntarily provided cash flow statements. These firms are likely to be influenced by recommendations of the German accounting profession, IAS 7, and the respective standards of other countries. This paper studies this influence by looking at the adoption pattern of the cash flow statement over time, and ist format. It uses milestones in the evolution of German professional recommendations and respective international standards to chart the development of voluntary cash flow statements. The paper analyzes the cross-sectional determinants of voluntary (international) cash flow statements using probit regressions and factor analysis. The results support the idea that capital-market forces drive the disclosure of cash flow statements that conform with international reporting practice.