Viewpoints: Asset acquisition versus business combinations (Mining)

If your company is involved in acquiring mining projects, this document will help you determine whether a project meets the definition of a business under IFRS 3 Business Combinations and assess the associated accounting implications.

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How do you know whether to apply IFRS 3 Business Combinations to your company’s acquired mining project? Viewpoints: Applying IFRS in the Mining Industry: Asset Acquisition Versus Business Combination discusses the factors to consider when analyzing if a project meets the definition of a business under IFRS 3 as well as the associated accounting implications.

Prepared by Chartered Professional Accountants of Canada (CPA Canada) and the Prospectors and Developers Association of Canada, this essential resource for mining companies discusses the guidance of IFRS 3 in an industry specific context.

Learn key questions to consider, including:

  • Does the acquired mining project have, and has the entity acquired, the two essential elements — inputs and processes applied to those inputs?
  • What is the extent and significance of the acquired inputs, such as mine processing infrastructure?
  • To what extent are the employees working on exploration, development or mining?
  • How close is the mining project to being a developed mine?
  • Does the acquired project have the ability to obtain access to customers that will purchase the outputs?