CAPIC REVIEW

Journal of Accounting, Auditing and Business Management

ISSN 0718-4662

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Vol. 14 (2016): CAPIC REVIEW
Investigation

Impairment of mining assets according to the international accounting standards and Earnings management: evidence for chilean mining

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  • Claudia Orellana Fuentes
Claudia Orellana Fuentes
Pontificia Universidad Católica de Valparaíso
DOI: https://doi.org/10.35928/cr.vol14.2016.35
Categories

Published 2016-12-10

Keywords

  • Mining Chile,
  • Impairment Test

How to Cite

Orellana Fuentes, C. . (2016). Impairment of mining assets according to the international accounting standards and Earnings management: evidence for chilean mining. CAPIC REVIEW, 14, 83–92. https://doi.org/10.35928/cr.vol14.2016.35
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Abstract

The year 2015 was marked by a decline in the prices of different metals, including copper. Chile is characterized by being a historically mining country, and multiple effects have been foretold in the national media.

The objective of this research is, firstly, to verify the real effects of the decline of the price of copper in the financial statements of the Chilean mining companies by studying a sample of annual financial statements of 33 mining companies. Secondly, to confirm if the managers of the mining companies of the sample use the discretion provided by the International Accounting Standards in the application of impairment tests to their assets.

Specifically, the impact of the decline in the price of copper it´s analyzed regarding the carrying amount of Inventories, Property, Plant and Equipment (PP&E), and Intangible Assets.

The results confirm that only 36% of the companies of the sample applied an impairment test to their assets, and those that show a greater impact on the Financial Statements are related to mining operations that have exploitation difficulties.

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