In a joint submission, CA ANZ and CPA Australia recommend, rather than pursuing the development of an accounting standard for natural resources, the reporting of information on natural resources be considered as part of the IPSASB’s sustainability reporting project. 

The financial accounting for natural resources is a challenging topic, notably around the concepts of ownership and control. The difficulty compounds in relation to measurement uncertainty and applying the proposed definition of ‘natural resources’. In our view, many natural resources are unlikely to meet the definition of an asset, and even if some natural resources do meet the definition of an asset, the cost of reliably measuring the asset is likely to be prohibitive. 

While we consider that non-financial information about natural resources is more useful for accountability and decision-making in relation to the sustainability of natural resources, we caution against adding more financial statement disclosure requirements. The benefit of developing an accounting standard for natural resources is, therefore, questionable.