A dam in the south-eastern state of Minas Gerais in Brazil, located within a mining operation controlled by BHP Billiton, collapsed on 5th November 2015. The dam collapse was reported to have caused at least 19 deaths, destroyed livelihoods and villages, left hundreds of people homeless, and poisoned a major river.
The dam collapse has created many issues that BHP Billiton is addressing or will need to address. Of relevance to MAA310 Accounting and Society, these issues include the valuation of the relevant mining operation as an asset, the recognition of damages and rehabilitation costs arising from the mine collapse, and the disclosure of relevant social and environmental information relating to the collapse.
You are to write a research essay which outlines the accounting and disclosure issues facing BHP Billiton as a result of the dam collapse. In the course of your answer, you should include discussion of a) the accounting principles and standards applicable to (i) the recognition and valuation of the mining operation as an asset and (ii) the potential liabilities arising from the dam collapse, b) the factors that would influence the accounting policy choice decisions in these respects to be made by BHP Billiton’s directors, and c) the nature of, and theoretical reasons for, the social and environmental disclosures that BHP Billiton has made as a result of the dam collapse.