Unformatted text preview: bable minerals reserves or measured and indicated and inferred
mineral resources estimates may impact the carrying value of property, plant and equipment, goodwill,
reclamation and remediation obligations, recognition of deferred tax amounts and depreciation, depletion
and amortization. Purchase Price Allocation
Applying the acquisition method to business combinations requires each identifiable asset and liability to be
measured at its acquisition-date fair value. The excess, if any, of the fair value of consideration over the fair
value of the net identifiable assets acquired is recognized as goodwill. The determination of the acquisitiondate fair values often requires management to make assumptions and estimates about future events. The
assumptions and estimates relating to determining the fair value of property, plant and equipment acquired KINROSS GOLD 2012 ANNUAL REPORT MDA43 generally require a high degree of judgment, and include estimates of mineral reserves acquired, future
metal prices and discount rates. Changes in any of the assumptions or estimates used in determining the fair
value of acquired assets and liabilities could affect the amounts assigned to assets, liabilities and goodwill in
the purchase price allocation. Depreciation, Depletion and Amortization
Plants and other facilities used directly in mining activities are depreciated using the units-of-production
(“UOP”) method over a period not to exceed the estimated life of the ore body based on recoverable ounces
to be mined from proven and probable reserves. Mobile and other equipment is depreciated, net of residual
value, on a straight-line basis, over the useful life of the equipment but does not exceed the related
estimated life of the mine based on proven and probable reserves.
The calculation of the UOP rate, and therefore the annual depreciation, depletion and amortization expense,
could be materially affected by changes in the underlying estimates. Changes in estimates can be the result
of actual future production differing from current forecast...
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This document was uploaded on 03/30/2014.
- Spring '14