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Unformatted text preview: o agreed with the PRMS definition. Concerns raised related to the approach for incorporating the definition into any future IFRS. Also, respondents suggested that application guidance may be required to ensure PRMS is applied consistently. Concern was also raised over the project team's proposal that reserves estimates be prepared using a market participant's assumption of commodity price. Respondents who commented expressed a preference for a historical price assumption to remove subjectivity. Disclosure proposals respondents' views While a majority (63%) of respondents generally agreed with the disclosure objectives, almost all respondents expressed significant concern about the level of granularity of the disclosures proposed. Concern was also raised as to whether the disclosure of reserve quantities should be subject to audit. Some of the proposed disclosures differ from those currently required by some market regulators. Also, additional information may be required in the future if such disclosures are mandated. Therefore, this area is likely to require significant management focus as practice and requirements develop. The importance of reserves reporting and the lack of current guidance led some respondents to support development of disclosure requirements separately, and more urgently, than accounting requirements. 2011 KPMG International Cooperative ("KPMG International"). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated. 2011 KPMG IFRG Limited, a UK company, limited by guarantee. All rights reserved. 20 Impact of IFRS: Oil and Gas 8 Financial instruments The conversion process must include a review of the existence, classification and accounting for financial instruments, including derivatives. Future changes in the accounting are expected
Oil and gas companies generally have financial instrument accounting issues owing to the significant commodity price risk that they face and the structures in place to manage this and other exposu...
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