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Unformatted text preview: cial assets managed in an open portfolio (the supplement). The supplement proposes to replace the incurred loss approach to impairment of financial assets with an approach based on expected losses. Extensive disclosures were also proposed. The IASB issued Exposure Draft Hedge Accounting in December 2010, proposing significant changes to the current hedge accounting requirements. The proposals were designed to integrate hedge accounting more closely with risk management policies and objectives. For companies applying hedge accounting to commodity price transactions, the process for assessing hedge effectiveness would change. The proposals also expanded the range of instruments that can be designated as hedged instruments. IASB deliberations on both projects are ongoing. 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. 22 Impact of IFRS: Oil and Gas Information technology and systems considerations
A major effect of converting to IFRS will be the increased burden throughout the oil and gas organisation of capturing, analysing, and reporting new data to comply with IFRS requirements. Making strategic and tactical decisions relating to information systems and supporting processes early in the project helps limit unnecessary costs and risks arising from possible duplication of effort or changes in approach at a later stage. Much depends on factors such as: the type of enterprise system and whether the vendor offers IFRSspecific solutions; whether the system has been kept current, as older versions first may need updating; and the level of customisation, as the more customised the system, the more effort and planning the conversion process will likely take. differences into technical system specifications. One of the difficulties that oil and gas companies may face in creating...
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