CPAs Role in Troubled Davao Mining Industry
Whether you like it or not, mining is a big source of money across the Davao region. Some mining firms even have Davao CPAs to help them with financial management. That may tell you something about the complex processes that are involved in mining. But it’s not without its drawbacks.
See how the industry evolved from the local to national scene and where do Davao accountants really fit into the picture?
Issues in the Mining Industry
President Aquino has released Executive Order 79 last year that allows mining activities to proliferate without consulting local officials. But Davao City’s LGU headed by the Duterte’s said otherwise: Mining will still receive a stiff ban within the city, very much unlike its counterparts within the region.
Why? Davaoeño’s have experienced firsthand what it’s like to be at the receiving end of nature’s wrath. The City of Davao has been struck with Ondoy like flashfloods last June 2011, all blamed to quarrying, a jargon still related to mining.
Many indigenous groups protested over mining efforts in the city. Those living in Paquibato District of this city are main complainants. The EO may approve a local mining company to explore their untapped resources and possibly damage the watershed serving the whole of Davao City.
Where do Davao CPAs Fit In?
Despite the ire that mining receives in these parts, there’s no denying that this discipline won’t go away easily even with local bans in effect. Mining rakes billions elsewhere, despite these bans.
When you’re involved in large sums of money, how do you manage it? Hiring expert financial professionals in the person of certified accountants.
Here are varied ways through which they can help you:
- Handle depreciation – What is depreciation? You may not know it in detail but any accountant involved in the mining industry can easily tell you about its importance. It is a very technical accounting term related to depletion that helps owners adjust losses of actual minerals excavated into what they report for taxes in local or international scene. You think that’s messy? Hiring an expert to help you won’t be.
- Foreign exchange woes – Believe it or not, mining companies don’t just work locally. Most of them have networks of international connections that double financial figures for every product delivered. The downside? More countries means more foreign currency policies you need to adhere to which is a difficult task to keep at.
- Miscellaneous costs – This includes maintenance and ongoing expenditures on what? Mining is still a business, it needs large equipments to continue operation and that too needs maintenance to work at its best. Costs for that may amount to thousands but your accountant can take care of saving methods.
- Cost of impairments – Mining is a double-edged sword industry. With all the profits it promises to deliver, the life of employees are at stake when they’re down there, digging. Real hazards happen and when the inevitable happens, your accountant can keep the business running even when medical and benefit claims arise over work-related issues.
- Inventories – You’ll appreciate it better if you operate large scale mining operations in more than one location. It’s difficult to keep up with equipments, people and the minerals extracted but a CPA from Davao can help in that.
- Environmental effects – One thing that is just as true for this industry is the many detrimental effects it poses to health and environment. Sure you may have environmentalists on watch but its good to prepare environmental reports with profit in mind when in question by authorities. Aside from a legal team, your accounting team can become your life-saver.
That’s just tip of the iceberg since there’s more to professional accountants than what’s listed above. Go talk to one near you and be enlightened.