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August 15, 2010

IASB extractives paper receives support

Most of the comment letters received by the International Accounting Standards Board (IASB) on a discussion paper proposing an IFRS for extractive activities said the project should go forward.

However, many respondents questioned whether creating a separate standard is the right way forward.

The extractive activities paper discusses how a new standard could improve the relevance and comparability of financial reporting on extractive activities of companies in the mining, oil and natural gas sectors.

A key feature of the proposal is that extractive activities entities must present key financial information on a country-by-country basis rather than the current practice of aggregating information by region or business line.

The Association of Charted Certified Accountants (ACCA) supported the creation of a new standard, but said the discussion paper lacks a clear rationale for why a distinct accounting approach is needed for entities operating in the extractive activities sectors.

“We believe the IASB should further investigate why the current suite of IFRS cannot be appropriately applied by these sectors,” the ACCA said.

The Institute of Chartered Accountants for England and Wales (ICAEW) does not support a development of a distinct IFRS for extractive industries and said the IASB should re-examine the existing IFRS in the context of extractive industries.

The deadline for comments on the extractive activities discussion paper was 30 July.

The IASB will now analyse and review the proposals and comments before deciding whether to put the project on its agenda.

 

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