All news by: Michael Simms

Mining Indaba 2018 – the key takeaways

A boost in commodity prices, an improved political outlook for South Africa and Zimbabwe and a greater appetite for investment in the mining sector were the key takeaways from the 2018 African Mining Indaba in Cape Town. Here we discuss the opportunities and challenges facing the sector and what the future holds. 

Increased disclosure required under IFRS 15: are you ready?

New accounting standard IFRS 15, Revenue from Contracts with Customers, introduces more detailed requirements for presentation and disclosure than the standards it replaces. Shipping company financial statements do not currently disclose many of these new elements, so attention needs to be given to how this information is obtained and whether accounting systems and processes need to be amended or updated.

Baltic Exchange sale – tax implications

It was announced in August that Singapore Exchange Ltd (SGX) had made an offer to purchase the entire share capital of The Baltic Exchange Limited (Baltic Exchange). This became effective on 8 November and payments are expected to be despatched to shareholders by 18 November. We have summarised the main issues to consider from a tax perspective below. We have also prepared a more detailed factsheet, which can be accessed here.

Shipping must improve risk management

Not enough companies in the shipping industry are following joined-up risk management procedures.

Our second annual Shipping Risk Survey revealed a fall, when compared to last year, in the overall level of satisfaction on the part of respondents that sound risk management had contributed to the success of their organisations. The involvement of senior management in managing risk at the highest level also declined against last year.

Implications of new US lease accounting standard for shipping & offshore maritime sectors

The Financial Accounting Standards Board (FASB) in the United States has issued a lease accounting standard update following the release in January 2016 of an International Financial Reporting Standard (IFRS) dealing with the same subject. Although it had been expected that the FASB and IFRS standards would be identical, there are instead now two standards which, although similar in many respects, contain significant differences. The shipping and offshore maritime sectors will need to assess the effect of these changes on their balance sheets.

Keeping control of the wheel during tough financial times

As shipping companies and the offshore oil services industry feel an increasing financial squeeze, management teams need to take proactive action to keep control of their future.

The offshore oil services industry, for example, has been under pressure since the collapse in the oil price, enduring low charter rates. That pressure will only increase following Iran’s agreement to curb its nuclear programme in return for the removal of sanctions. Crude oil from Iran is not expected to flow freely for several months, but when it does the offshore industry will face even greater challenges in meeting existing debt obligations and conserving cash. Offshore oil services companies would be well advised to take a close look at the options available to them before creditors start taking action for themselves.