DESERT GOLD EARLY ADOPTS INTERNATIONAL FINANCIAL REPORTING STANDARDS
July 05 2011 - 4:35PM
PR Newswire (Canada)
VANCOUVER, July 5, 2011 /CNW/ -- VANCOUVER, July 5, 2011 /CNW/ -
Desert Gold Ventures Inc. (TSX-V: DAU and OTCOX: DAUGF) (the
"Company") announces that its application to early adopt
International Financial Reporting Standards ("IFRS") under National
Instrument 52-107 has been approved by the applicable Canadian
Securities Administrators. The Company has chosen to early adopt
IFRS and will commence reporting under these standards for the
period beginning August 1, 2010, with an August 1, 2009 date of
transition (the "Transition Date"). Comparative periods for fiscal
2010 will also be restated under IFRS. As background, in February
2008, the Canadian Accounting Standards Board confirmed that IFRS
will replace Canadian generally accepted accounting principles
("GAAP") for all publicly accountable enterprises for financial
periods beginning on and after January 1, 2011, with the option
available for enterprises to early adopt upon receipt of
discretionary approval from the Canadian securities regulatory
authorities. The Company believes that the adoption of IFRS will
eliminate complexity from the its financial statement preparation
process by allowing the Company to utilize IFRS, the emerging,
globally accepted accounting standard, for accounting and audit
purposes throughout the various jurisdictions in which it operates
and intends to operate following completion of the proposed
acquisition (the "Acquisition") of Transafrika Belgique S.A. and
its mineral property interests in Rwanda, Mali and Senegal.
(For further details concerning the Acquisition, please refer to
the Company's press release dated June 21, 2011, available at
www.SEDAR.com). IFRS Conversion The Company's comprehensive IFRS
conversion plan addresses changes in accounting policies,
restatement of comparative periods, organization, internal controls
and any required changes to business processes. To facilitate this
process and ensure the full impact of the conversion is understood
and managed reasonably, the Company had external consultants,
including the Company's auditors Davidson & Company LLP,
assisting as needed. The accounting staff has also attended several
training courses on the adoption and implementation of IFRS.
Through in-depth training and the reconciliation of historical GAAP
financial statements to IFRS, the Company believes that its
accounting personnel have attained a thorough understanding of
IFRS. The Company has reviewed its accounting system, its internal
controls and its disclosure control processes and believes they do
not require significant modification as a result of the conversion
of IFRS. Initial adoption of IFRS IFRS 1 "First-time Adoption of
International Financial Reporting Standards" sets forth guidance
for the initial adoption of IFRS. Under IFRS 1, the standards are
applied retroactively at the Transition Date with all adjustments
to assets and liabilities taken to retained earnings unless certain
exemptions are applied. The Company will be applying the following
exemptions to its opening balance sheet dated August 1, 2009: (a)
Business combinations IFRS1 indicates that a first-time adopter may
elect not to apply IFRS 3 Business Combinations retrospectively to
business combinations that occurred before the date of transition
to IFRS. The Company takes advantage of this election and applies
IFRS 3 to business combinations that occurred on or after August 1,
2009. There is no adjustment required to the August 1, 2009's
statement of financial position on the Transition Date. (b) IFRS 2
- Share-based payment transactions IFRS 2 Share-based Payment has
not been applied to equity instruments that were granted on or
before November 7, 2002, nor has it been applied to equity
instruments granted after November 7, 2002 that vested before
August 1, 2009. (c) IAS 27 - Consolidated and Separate Financial
Statements In accordance with IFRS 1, if a company elects to apply
IFRS 3 Business Combinations retrospectively, IAS 27 Consolidated
and Separate Financial Statements must also be applied
retrospectively. As the Company elected to apply IFRS 3
prospectively, the Company has also elected to apply IAS 27
prospectively. (d) IAS 23 - Borrowing Costs IAS 23 Borrowing costs
has not been applied to borrowing costs relating to qualifying
assets for which the commencement date for capitalization is on or
after August 1, 2009. (e) IAS 16 - Property, plant and equipment
IAS 16 Property, plant and equipment allows for property, plant and
equipment to continue carried at cost less depreciation, same as
under GAAP. Impact of IFRS IFRS employs a conceptual framework that
is similar to Canadian GAAP. The adoption of IFRS will not have any
material impact on the financial information previously disclosed
under Canadian GAAP. The Company identified the following
adjustments as a result of the adoption of IFRS: (a) Share-based
payment transactions IFRS 2, similar to Canadian GAAP, requires the
Company to measure share-based compensation related to share
purchase options granted to employees at the fair value of the
options on the date of grant and to recognize such expense over the
vesting period of the options. However, under IFRS 2, the
recognition of such expense must be done with a "graded vesting"
methodology as opposed to the straight-line vesting method allowed
under Canadian GAAP. In addition, under IFRS, forfeitures estimates
are recognized in the period they are estimated, and are revised
for actual forfeitures in subsequent periods; while under Canadian
GAAP, forfeitures of awards are recognized as they occur. Under
IFRS graded vesting methodology, during the nine months ended April
30, 2011, the Company would have recorded US$486,391 as share-based
payment versus US$495,544 stock-based compensation under Canadian
GAAP. As a result, US$9,153 would be adjusted in the share-based
payment expense in the statement of operations and the same amount
would be adjusted in the reserves account in the statement of
equity. During the year ended July 31, 2010, the Company would have
recorded $607,821 as share-based payment versus US$370,288
stock-based compensation under Canadian GAAP. As a result,
US$237,533 would be adjusted in the share-based payment expense in
the statement of operations and the same amount would be adjusted
in the reserves account in the statement of equity. In order to
allow the users of the financial statements to better understand
other changes between IFRS and GAAP that do not have any
quantitative effect or adjustments to the Company's financial
statements, the following qualitative explanation of the
differences between GAAP and IFRS is provided: (a) Income tax
Income tax expense is calculated in the same manner in accordance
with GAAP and IFRS. Future income tax asset / liability is also
calculated in the same manner in accordance with GAAP and IFRS. (b)
Property, plant and equipment GAAP and IFRS allow the use of
original cost less depreciation as the cost base. IFRS requires
separate depreciation rate for components that depreciate
differently. (c) Exploration for and Evaluation of Mineral
Resources GAAP and IFRS allow the capitalization of costs
associated with the exploration for and evaluation of mineral
resources. This news release was prepared by Company management,
which takes full responsibility for content. Neither the TSX
Venture Exchange nor its Regulation Services Provider (as that term
is defined in the policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this release.
To view this news release in HTML formatting, please use the
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Jared Scharf, Chief Financial Officerbr/ Desert Gold Ventures
Inc.br/ Tel. (416) 662-3971br/ e-mail: a
href="mailto:jared@desertgold.ca"jared@desertgold.ca/abr/
web: a
href="http://www.desertgold.ca/"www.desertgold.ca/a /p
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