NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013
(All amounts in US$’000’s unless otherwise stated)
82
FORTUNA SILVER MINES INC. | 2014 ANNUAL REPORT
v) Significant Changes Including Initial Adoption of Accounting Standards
The Company has adopted the following accounting standards along with any consequential amendments, effective
January 1, 2014:
IAS 32 Financial Instruments – Presentation in Respect of Offsetting (Amendment); IFRIC 21 – Levies; and, IAS 36 –
Impairment of Assets – Amendments for Recoverable Amount Disclosures for Non-Financial Asset.
The Company has adopted the following amendments, effective July 1, 2014:
IFRS 2 Share-based Payment – Definition of vesting condition (Amendment)
The amendment to IFRS 2 provides the definitions of vesting condition and market condition and adds definitions for
performance condition and service condition. The amendment is effective for transactions with a grant date on or after
July 1, 2014.
IFRS 3 Business Combinations – Contingent consideration (Amendment)
The amendment to IFRS 3 requires contingent consideration that is classified as an asset or a liability to be measured
at fair value at each reporting date. The amendment is effective for transactions with acquisition dates on or after July 1,
2014.
The Company has adopted the above amendments which did not have a significant impact on the Company’s Financial
Statements.
w) New Accounting Standards
The Company is currently assessing the impact of adopting the following new accounting standards, noted below, on the
Company’s Financial Statements.
IFRS 10, Consolidated Financial Statements, and IAS 28, Investments in Associates and Joint Ventures (2011)(Amendment)
On September 11, 2014, the IASB issued narrow-scope amendments to IFRS 10,
Consolidated Financial Statements,
and IAS 28,
Investments in Associates and Joint Ventures
(2011). The amendments address an acknowledged
inconsistency between the requirements in IFRS 10 and those in IAS 28 (2011), in dealing with the sale or contribution
of assets between an investor and its associate or joint venture. The main consequence of the amendments is that a
full gain or loss is recognized when a transaction involves a business (whether it is housed in a subsidiary or not). A
partial gain or loss is recognized when a transaction involves assets that do not constitute a business, even if these
assets are housed in a subsidiary. The amendments will be effective from annual periods commencing on or after January
1, 2016.
IFRS 11 Joint Arrangements (Amendment)
The amendment to IFRS 11
Joint Arrangements
adds new guidance on how to account for the acquisition of an interest
in a joint operation that constitutes a business. The amendments specify the appropriate accounting treatment for such
acquisitions. The amendments are effective for annual periods beginning on or after January 1, 2016, with earlier
application permitted. Transactions before the adoption date are grandfathered.
IAS 16 Property, Plant and Equipment and IAS 38 Intangible Assets (Amendment)
The amendment to IAS 16
Property, plant and equipment
and IAS 38
Intangible assets
on depreciation and amortisation
clarifies that the use of revenue-based methods to calculate the depreciation of an asset is not appropriate because
revenue generated by an activity that includes the use of an asset generally reflects factors other than the consumption
of the economic benefits embodied in the asset. The amendment also clarified that revenue is generally presumed to be
an inappropriate basis for measuring the consumption of the economic benefits embodied in an intangible asset. The
amendment is effective for annual period starting on or after January 1, 2016, with earlier application permitted.
IFRS 15 Revenue from Contracts with Customers
IFRS 15,
Revenue from Contracts with Customers
specifies how and when revenue should be recognized as well as
requiring more informative and relevant disclosures. The standard supersedes IAS 18 Revenue, IAS 11 Construction
Contracts and a number of revenue-related interpretations. Application of the standard is mandatory and it applies to
nearly all contracts with customers: the main exceptions are leases, financial instruments and insurance contracts.
IFRS 15 is effective for annual periods starting on or after January 1, 2017, with earlier application permitted.
IFRS 9 Financial Instruments – Classification and Measurement
IFRS 9,
Financial Instruments:
IFRS 9 introduces the new requirements for the classification, measurement and de-
recognition of financial assets and financial liabilities. The amendments are effective for annual periods beginning on or
after January 1, 2018, with earlier application permitted.
2. Basis of Consolidation and Summary of Significant Accounting Policies (Continued)
