International GAAP® 2019: Generally Accepted Accounting Practice under International Financial Reporting Standards
Page 976
changes in, Ch. 39, 9.2
3.3.2.D; Ch. 14, 5.1.1
determining, Ch. 39, 9.1
ED/2017/1 –Annual Improvements to IFRS Standards, Ch. 29,
guidance under national accounting standards, Ch. 39, 1.5
10.3.5
impact of IFRS 15, Ch. 39, 12
External hedging instruments, offsetting, Ch. 49, 3.2.1
commodity-based contracts, modifications to, Ch. 39,
Extractive industries, Ch. 39, 1–20. See also IFRS 6; Mineral
12.10
reserves and resources; Reserves
embedded derivatives in commodity arrangements,
acquisitions, Ch. 39, 8
Ch. 39, 12.8
accounting for land acquisitions, Ch. 39, 8.4.2
forward-selling contracts to finance development, Ch. 39,
acquisition of an interest in a joint operation that is a
12.6
business, Ch. 39, 8.3
gold bullion sales (mining only), Ch. 39, 12.13
asset acquisitions and conditional purchase consideration,
inventory exchanges with the same counterparty, Ch. 39,
Ch. 39, 8.4.1
12.3
business combinations, Ch. 39, 8.2
multi-period commodity-based sales contracts, Ch. 39,
events after the reporting period, Ch. 39, 20.2
12.15
goodwill in business combinations, Ch. 39, 8.2.1
overlift and underlift and production imbalances, Ch. 39,
impairment of assets and goodwill recognised on
12.4
acquisition, Ch. 39, 8.2.2
principal vs. agent considerations in commodity-based
value beyond proven and probable reserves (VBPP),
contracts, Ch. 39, 12.11
Ch. 39, 8.2.3
production sharing contracts/arrangements (PSCs),
business combinations vs. asset acquisitions, Ch. 39, 8.1
Ch. 39, 12.5
definition of a business, Ch. 39, 8.1.2
repurchase agreements, Ch. 39, 12.14
differences between asset purchase transactions and,
royalty income, Ch. 39, 12.9
Ch. 39, 8.1.1
sale of product with delayed shipment, Ch. 39, 12.2
April 2010 discussion paper, extractive activities, Ch. 39, 1.3
shipping, Ch. 39, 12.12
asset measurement, Ch. 39, 1.3.3
take-or-pay contracts, Ch. 39, 12.16
asset recognition, Ch. 39, 1.3.2
impact of IFRS 16, Ch. 39, 17.3
disclosure, Ch. 39, 1.3.4
allocating contract consideration, Ch. 39, 17.3.4
Extractive Activities project, status of, Ch. 39, 1.3.6
arrangements entered into by joint arrangements, Ch. 39,
project status, Ch. 39, 1.3.6
17.3.4
publish what you pay proposals, Ch. 39, 1.3.5
definition of a lease, Ch. 39, 17.3.2
reserves and resources, definitions of, Ch. 39, 1.3.1
identifying and separating lease and non-lease components
decommissioning and restoration/rehabilitation, Ch. 39, 10
and allocating contract consideration, Ch. 39, 17.3.4
indefinite life assets, Ch. 39, 10.3
identifying lease payments included in the measurement of
recognition and measurement issues, Ch. 39, 10.1
the lease liability, Ch. 39, 17.3.6
treatment of foreign exchange differences, Ch. 39, 10.2
interaction of leases with asset retirement obligations,
definitions, Ch. 39, 1.1, 21
Ch. 39, 17.3.8
depreciation, depletion and amortisation (DD&A), Ch. 39, 16
joint arrangements, Ch. 39, 17.3.3
block caving, Ch. 39, 16.2
scope and scope exclusions, Ch. 39, 17.3.1
requirements under IAS 16 and IAS 38, Ch. 39, 16.1
substitution rights, Ch. 39, 17.3.3
assets depreciated using the straight-line method,
impairment of assets, Ch. 39, 11
Ch. 39, 16.1.2
basis of recoverable amount – value-in-use (VIU) or fair
assets depreciated using the units of production
value less costs of disposal (FVLCD), Ch. 39, 11.3
method, Ch. 39, 16.1.3
calculation of FVLCD, Ch. 39, 11.5
mineral reserves, Ch. 39, 16.1.1
calculation of VIU, Ch. 39, 11.4
events after the reporting period, Ch. 39, 20
cash flows from mineral reserves and resources and the
business combinations-application of the acquisition
appropriate discount rate, Ch. 39, 11.4.2.A
method, Ch. 39, 20.2
commodity price assumptions, Ch. 39, 11.4.3, 11.5.2
completion of E&E activity after, Ch. 39, 20.3
foreign currency cash flows, Ch. 39, 11.4.5, 11.5.4
reserves proven after the reporting period, Ch. 39, 20.1
future capital expenditure, Ch. 39, 11.4.4, 11.5.3
financial instruments, Ch. 39, 13
identifying cash-generating units (CGUs), Ch. 39, 11.2
embedded derivatives, Ch. 39, 13.2
impairment indicators, Ch. 39, 11.1
development of gas markets, Ch. 39, 13.2.4
low mine or field profitability near end of life, Ch. 39, 11.6
foreign currency embedded derivatives, Ch. 39, 13.2.1
projections of cash flows, Ch. 39, 11.4.2, 11.5.1
long-term supply contracts, Ch. 39, 13.2.3
inventories, Ch. 39, 14
provisionally priced sales contracts, Ch. 39, 13.2.2
carried at fair value, Ch. 39, 14.4
core inventories, Ch. 39, 14.3
Index
127
heap leaching (mining), Ch. 39, 14.6
unitisations, Ch. 39, 15.4
recognition of work in progress, Ch. 39, 14.1
well workovers and recompletions (oil and gas), Ch. 39,
sale of by-products and joint products, Ch. 39, 14.2
15.2
by-products, Ch. 39, 14.2.1
revenue recognition, Ch. 39, 12
joint products, Ch. 39, 14.2.2
exchanges of inventories, Ch. 39, 12.3
stockpiles of low grade ore (mining), Ch. 39, 14.5
forward-selling contracts to finance development, Ch. 39,
investments in the extractive industries, Ch. 39, 7
12.6
joint arrangements, Ch. 39, 7.1
overlift and underlift (oil and gas), Ch. 39, 12.4
assessing joint control, Ch. 39, 7.1.1
facility imbalances, Ch. 39, 12.4.4
determining whether a manager has control, Ch. 39,
overlift and underlift practice, Ch. 39, 12.4.5
7.1.2
sales method, Ch. 39, 12.4.1
managers of joint arrangements, Ch. 39, 7.1.4
settlement, Ch. 39, 12.4.3
non-operators, Ch. 39, 7.1.5
revenue in the development phase, Ch. 39, 12.1
parties without joint control/control, Ch. 39, 7.1.3
incidental revenue, Ch. 39, 12.1.1
undivided interests, Ch. 39, 7.2
integral to development, Ch. 39, 12.1.2
legal rights to explore for, develop and produce mineral
sale of product with delayed shipment, Ch. 39, 12.2
properties, Ch. 39, 5
trading activities, Ch. 39, 12.7
concessionary agreements (concessions), Ch. 39, 5.2
risk-sharing arrangements, Ch. 39, 6
different types of royalty interests, Ch. 39, 5.7
asset swaps, Ch. 39, 6.3
net profits interests, Ch. 39, 5.7.4
E&E assets, Ch. 39, 6.3.1
overriding royalties, Ch. 39, 5.7.2
&nb
sp; PP&E, intangible assets and investment property,
production payment royalties, Ch. 39, 5.7.3
Ch. 39, 6.3.2
revenue and royalties: gross or net?, Ch. 39, 5.7.5
Exchanges of E&E assets for other types of assets,
working interest and basic royalties, Ch. 39, 5.7.1
Ch. 39, 6.3.3
evolving contractual arrangements, Ch. 39, 5.5
carried interests, Ch. 39, 6.1
how a mineral lease works, Ch. 39, 5.1
arrangements in E&E phase, Ch. 39, 6.1.2
joint operating agreements, Ch. 39, 5.6
financing-type carried interest arrangements in the
pure-service contract, Ch. 39, 5.4
development phase, Ch. 39, 6.1.3
traditional production sharing contracts, Ch. 39, 5.3
purchase/sale-type carried interest arrangements in the
long-term contracts and leases, Ch. 39, 17
development phase, Ch. 39, 6.1.4
embedded leases, Ch. 39, 17.1
types of carried interests, Ch. 39, 6.1.1
impact of IFRS 16, Ch. 39, 17.3
farm-ins and farm-outs, Ch. 39, 6.2
take-or-pay contracts, Ch. 39, 17.2
farm-in arrangements in E&E phase, Ch. 39, 6.2.1
make-up product and undertake, Ch. 39, 17.2.1
farm-in arrangements outside the E&E phase:
mineral reserves and resources, Ch. 39, 2
accounting by the farmee, Ch. 39, 6.2.2
disclosure of mineral reserves and resources, Ch. 39, 2.4
farm-in arrangements outside the E&E phase:
mining sector, Ch. 39, 2.4.2
accounting by the farmor, Ch. 39, 6.2.3
oil and gas sector, Ch. 39, 2.4.1
status of the statement of recommended practice, UK Oil
value of reserves, Ch. 39, 2.4.3
Industry Accounting Committee, June 2001 (OIAC
international harmonisation of reserve reporting, Ch. 39, 2.1
SORP), Ch. 39, 1.4
mining resource and reserve reporting, Ch. 39, 2.3
taxation, Ch. 39, 19
CIRSCO International reporting template, Ch. 39, 2.3.1
excise duties, production taxes and severance taxes, Ch. 39,
petroleum reserve estimation and reporting, Ch. 39, 2.2
19.1
basic principles and definitions, Ch. 39, 2.2.1
petroleum revenue tax (or resource rent tax), Ch. 39,
classification and categorisation guidelines, Ch. 39, 2.2.2
19.1.2
property, plant and equipment, Ch. 39, 15
production-based taxation, Ch. 39, 19.1.1
care and maintenance, Ch. 39, 15.3
grossing up of notional quantities withheld, Ch. 39, 19.2
major maintenance and turnarounds/renewals and
tolling arrangements, Ch. 39, 18
reconditioning costs, Ch. 39, 15.1
unit of account, Ch. 39, 4
redeterminations, Ch. 39, 15.4.2
upstream versus downstream activities, Ch. 39, 1.6
as capital reimbursements, Ch. 39, 15.4.2.A
Fair presentation, Ch. 3, 4.1.1
decommissioning provisions, Ch. 39, 15.4.2.C
and compliance with IFRS, Ch. 3, 4.1.1.A
‘make-up’ oil, Ch. 39, 15.4.2.B
override, Ch. 3, 4.1.1.B
stripping costs in the production phase of a surface mine
Fair value. See also Fair value hedges; Fair value hierarchy; Fair
(mining), Ch. 39, 15.5
value less costs of disposal (FVLCD); Fair value measurement;
disclosures, Ch. 39, 15.5.5
IFRS 13
initial recognition, Ch. 39, 15.5.3
‘clean’ vs. ‘dirty’ values, Ch. 49, 7.4.7
recognition criteria-stripping activity asset, Ch. 39,
derivatives, discount rates for calculating, Ch. 49, 7.4.4.C
15.5.2
designation of own use contracts at fair value through profit or
scope of IFRIC 20, Ch. 39, 15.5.1
loss, Ch. 49, 12.2
subsequent measurement, Ch. 39, 15.5.4
financial assets and financial liabilities at, Ch. 46, 2.4
128 Index
Fair value —contd
depreciated replacement cost/current replacement cost as,
financial assets designated at fair value through profit/loss,
Ch. 20, 6.1.2
Ch. 50, 4.4.3
estimating, Ch. 20, 6.1
financial liabilities designated at fair value through profit/loss,
investments in subsidiaries, associates and joint ventures,
Ch. 50, 4.4.2
Ch. 20, 12.4.1
first-time adoption, Ch. 5, 3.3
and unit of account, Ch. 20, 6.1.1
future investment management fees in, Ch. 51, 8.2.1.B
Fair value measurement, Ch. 14, 1–23. See also Fair value; Fair
hedged items held at fair value through profit/loss, Ch. 49, 2.6.2
value hierarchy; IFRS 13; Offsetting positions; Valuation
hedging using instruments with non-zero fair value, Ch. 49,
techniques
7.4.4.B
agriculture, Ch. 38, 4
on initial recognition of financial instrument, measurement of,
establishing what to measure, Ch. 38, 4.2
Ch. 45, 3.3.2
determining costs to sell, Ch. 38, 4.4
of insurer’s liabilities, Ch. 51, 9.1.1.B
disclosures, Ch. 38, 5.2
of intangible assets, determining, Ch. 9, 5.5.2.F
additional disclosures if fair value cannot be measured
in intra-group transactions, Ch. 8, 4.3.1
reliably, Ch. 38, 5.3
investment property, fair value model, Ch. 19, 6
IAS 41-specific requirements, Ch. 38, 4.5
deferred taxation for property held by a ‘single asset’ entity,
interaction between IAS 41 and IFRS 13, Ch. 38, 4.1
Ch. 19, 6.10
overview of IFRS 13 requirements, Ch. 38, 4.6
estimating fair value, Ch. 19, 6.1
problem of measuring fair value for part-grown biological
comparison with value in use, Ch. 19, 6.1.3
assets, Ch. 38, 4.7
‘double counting,’ Ch. 19, 6.1.4
when to measure fair value, Ch. 38, 4.3
methods of estimation, Ch. 19, 6.1.1
asset/liability, Ch. 14, 5
observable data, Ch. 19, 6.1.2
characteristics
fair value of investment property under construction,
condition and location, Ch. 14, 5.2.1
Ch. 19, 6.3
restrictions on assets/liabilities, Ch. 14, 5.2.2
fair value of properties held under a lease, Ch. 19, 6.7
unit of account
fixtures and fittings subsumed within fair value, Ch. 19, 6.5
asset’s (or liability’s) components, Ch. 14, 5.1.4
future capital expenditure and development value (‘highest
and portfolio exception, Ch. 14, 5.1.2
and best use’), Ch. 19, 6.8
and PxQ, Ch. 7, 3.3.2.D, 7.3; Ch. 14, 5.1.1
inability to determine fair value of completed investment
vs. valuation premise, Ch. 14, 5.1.3
property, Ch. 19, 6.2
of associates, partial use of, Ch. 11, 5.4
negative present value, Ch. 19, 6.9
convergence with US GAAP, Ch. 14, 23
prepaid and accrued operating lease income, Ch. 19, 6.6
disclosures, Ch. 14, 23.2.4
accrued rental income and lease incentives, Ch. 19, 6.6.1
fair value of liabilities with demand feature, Ch. 14, 23.2.2
prepaid rental income, Ch. 19, 6.6.2
IFRS 13, development of, Ch. 14, 2
3.1
transaction costs incurred by the reporting entity on
practical expedient for alternative investments, Ch. 14, 23.2.1
acquisition, Ch. 19, 6.4
recognition of day-one gains and losses, Ch. 14, 23.2.3
leases (IAS 17), Ch. 23, 3.4.2
day 1 profits, financial instruments, Ch. 50, 4.5.2
property, plant and equipment, revaluation model, Ch. 18, 6
definitions, Ch. 14, 3
meaning of fair value, Ch. 18, 6.1
disclosures, Ch. 14, 20
cost approach, Ch. 18, 6.1.1.C
accounting policy, Ch. 14, 20.2
highest and best use, Ch. 18, 6.1.1.A
objectives
revaluing assets under IFRS 13, Ch. 18, 6.1.1
format of, Ch. 14, 20.1.1
valuation approaches, Ch. 18, 6.1.1.B
level of disaggregation, Ch. 14, 20.1.2
and value in use (VIU), differences between, Ch. 20, 7.3
‘recurring’ vs. ‘non-recurring, Ch. 14, 20.1.3
Fair value hedges, Ch. 49, 1.5, 5.1, 7.1; Ch. 50, 4.3.3
for recognised fair value measurements, Ch. 14, 20.3
adjustments to the hedged item, Ch. 49, 7.1.2
fair value hierarchy categorisation, Ch. 14, 20.3.3
discontinuing, Ch. 49, 8.3.1
highest and best use, Ch. 14, 20.3.9
firm commitments, Ch. 49, 5.1.1
level 3 reconciliation, Ch. 14, 20.3.6
foreign currency monetary items, Ch. 49, 5.1.2
non-recurring fair value measurements, Ch. 14, 20.3.2
layer components for, Ch. 49, 2.3.2
recurring fair value measurements, Ch. 14, 20.3.1
presentation, Ch. 49, 9.2
sensitivity of level 3 measurements to changes in
significant unobservable inputs, Ch. 14, 20.3.8
Fair value hierarchy, Ch. 14, 16
transfers between hierarchy levels for recurring fair
categorisation within, Ch. 14, 16.2
value measurements, Ch. 14, 20.3.4
over-the-counter derivative instruments, Ch. 14, 16.2.4
of valuation processes for level 3 measurements, Ch.
significance of inputs, assessing, Ch. 14, 16.2.1
14, 20.3.7
third-party pricing services/brokers, Ch. 14, 16.2.3
valuation techniques and inputs, Ch. 14, 20.3.5
transfers between levels within, Ch. 14, 16.2.2
regarding liabilities issued with an inseparable third-party
Fair value less costs of disposal (FVLCD), Ch. 20, 6
credit enhancement, Ch. 14, 20.5
calculation of (extractive industries), Ch. 39, 11.5
for unrecognised fair value measurements, Ch. 14, 20.4
Index
129
effective date and transition, Ch. 14, 22
counterparty credit risk and its own credit risk, Ch. 14,
fair value framework, Ch. 14, 4