Applying IFRS to metals - Introduction

Linked Publications     - Select - IFRS Illustrative Financial Statements Similarities & Differences - A comparison of IFRS and US GAAP       Linked Solutions     - Select - 1.1. Accounting for constant level of raw materials ... 1.2. Treatment and disclosure of idle capacity variances.... 1.3. Overhead allocation at abnormal capacity 1.4. Types of costs attributable to inventory 1.5. Joint products 1.6. Valuation of precious metals produced as a by-product 1.7. Net realisable value (NRV) of a commodity ... 1.8. Major replacements/ overhauls to components ... 1.9. Accounting for expenditures after the initial commencing... 1.10. Accounting for government grants and disclosure... 2.1. Assets retirement obligations 2.2. Provisions for restructuring 2.3. Provisions for environmental obligations 3.1. Revenue recognition on delivery terms 3.2. Sales to metals exchanges 4.1. Hedging 5.1. Identification and valuing of intangible assets 5.2. Accounting for tolling arrangements 6.1. Determination of the functional currency

A major step forward in the drive towards a single financial reporting language is now happening – as of January 2005 listed companies in the European Union are required to comply with International Financial Reporting Standards (IFRS) for their group financial statements. Many of the global metals companies currently use US GAAP while players from emerging markets often prefer IFRS. The global metals industry is going through a phase of massive cross-border mergers and acquisitions, and a common reporting platform is needed to better understand the value of businesses. IFRS looks to fulfil this global role.

Adopting IFRS is a complex challenge, however. Companies find it difficult to keep abreast of changes in IFRS and application guidance. Our global survey "International Financial Reporting Standards. Ready for take-off?"* indicates that the extent of effort required to implement IFRS tends to be significantly underestimated and that many companies do not implement IFRS in a holistic manner.

We have identified the most common issues specific for the metals industry and developed an IFRS solution set for metals companies. At the time of the release we have nineteen specific metals IFRS solutions, which will be expanded as a result of our own research and experience, and also in response to your questions. Because of this, we would very much like to hear from you either by contacting one of the professionals or by placing your requests or suggestionson our website.

• Download an electronic version of PricewaterhouseCoopers' IFRS solutions for metals* – an introduction - September 2005 - Release 1

• Order hard copies of PricewaterhouseCoopers’ IFRS solutions for metals* - an Introduction – September 2005 – Release 1