Extractive activities

Date recorded:

Project plan (Agenda Paper 19)


At its September 2021 meeting, the IASB decided that the scope and objectives of its research project Extractive Activities should be to explore two aspects of IFRS 6:

  • Developing requirements or guidance to improve the disclosure objectives and requirements about an entity’s exploration and evaluation (E&E) expenditure and activities to provide more useful information to primary users of financial statements
  • Removing the temporary status of IFRS 6

This paper presented the staff’s planned next steps for the project.

Project plan

The staff intends to perform research and considered the two elements of the project’s scope separately. In exploring whether to improve the disclosure objectives and requirements in IFRS 6 about an entity’s E&E expenditure and activities, the IASB will need to consider:

  • Users’ information needs
  • Why users do not currently get that information
  • The costs of requiring entities to provide that information

The staff identified the following three phases of work that would allow them to obtain sufficient evidence to help the IASB appropriately consider these matters:

  • Phase I—Desktop review of disclosure-related feedback received since 2018
  • Phase II—Limited outreach with users, preparers and auditors
  • Phase III—Limited outreach with national standard-setters

The staff expect to complete work on the removal of the temporary status of IFRS 6 concurrently with the work to improve the disclosure objectives and requirements of IFRS 6.

The staff asked whether IASB members agree with the proposed project plan.

IASB discussion

Generally, IASB members agreed with the project plan. One IASB member highlighted that IFRS 6, as a temporary standard, has a provision that entities applying IFRS 6 do not need to apply the requirements in IAS 8 to consider sources of authoritative requirements and guidance when developing an accounting policy. She suggested that this provision be removed as well when removing the temporary status of IAS 8. She asked whether staff could include this suggestion when performing outreach.

One IASB member asked whether Phase I could be conducted without further outreach. This was confirmed by the staff. Enough work had already been done to ensure this.

It was also discussed how a project on disclosures for extractive activities would interact with the fact that users state that they do not need more information as they can draw all their information from sources outside the financial statements, e.g. regulatory filings. The IASB should carefully considered if a project on disclosures is needed in this case. One IASB member said that this was an opportunity to find out what users are missing from financial statements and therefore seek elsewhere as this could guide the work on disclosure requirements. The staff said that in Phase I they would not only look at financial statements but also at regulatory findings

When asked by the Chair about the timeline, the staff replied that they expect to bring the results from Phase I of the project plan in July and would start Phase II thereafter.

IASB decision

All IASB members agreed with the project plan set out by the staff, with the addition to also look at information outside financial statements during Phase I.

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