CIL net worth to jump by $2.4bn after IFRS adoption

KOLKATA: Coal India Ltd's net worth will be boosted by USD 2.4 billion (approximately Rs 11,000 crore) once it adopts International Financial Reporting Standard ( IFRS) norms, Chairman Partha S Bhattacharyya said.

"Once we adopt IFRS, the USD 2.4 billion provision made on account of the overburden removal reserve will be released, as it is not required under the new accounting standard," Bhattacharyya told PTI.

At present, the cash balance of CIL is USD 8.4 billion and its net worth is USD 6 billion.

"The difference is due to our USD 2.4 billion provision kept under the overburden removal reserve used in our traditional accounting of mines," Bhattacharyya said.

Speaking about overburden removal accounting, Bhattacharyya said the fixed cost of mining was based on the mineable deposit and expected lifespan of a mine.

In the initial period, the cost of mining was less, but it gradually increased as mining went deeper.

However, under the IFRS, the mining cost has to be calculated on actuals and no provision for future mining is to be made.