form6k.htm
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
6-K
Report of
Foreign Private Issuer
Pursuant
to Rule 13a-16 or 15d-16 of
the
Securities Exchange Act of 1934
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For
the month of,
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February
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2010
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Commission
File Number
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000-13727
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Pan
American Silver Corp
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(Translation
of registrant’s name into English)
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1500-625
Howe Street, Vancouver BC Canada V6C 2T6
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(Address
of principal executive offices)
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Indicate by check mark whether the
registrant files or will file annual reports under cover of Form 20-F or Form
40F:
Indicate by check mark if the
registrant is submitting the Form 6-K in paper as permitted by
Regulation S-T Rule 101(b)(1):
Indicate
by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(7):
Indicate
by check mark whether by furnishing the information contained in this Form, the
registrant is also thereby furnishing the information to the Commission pursuant
to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
If “Yes” is marked, indicate below the
file number assigned to the registrant in connection with Rule
12g3-2(b): 82-_______________
DOCUMENTS
INCLUDED AS PART OF THIS REPORT
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Document
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1
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Supplemental
financial information relating to the reconciliation of the Company’s
unaudited interim consolidated financial statements for the three and nine
months ended September 30, 2009 and 2008 to U.S. GAAP in accordance with
Item 18 of Form 20-F.
|
This
report on Form 6-K is incorporated by reference into all of the Registrant’s
outstanding registration statements on Form F-10 and S-8 that have been filed
with the Securities and Exchange Commission.
Document
1
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1.
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Differences
between Canadian and United States Generally Accepted Accounting
Principles
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These
financial statements are prepared in accordance with accounting principles
generally accepted in Canada (“Canadian GAAP”) which differ in certain material
respects from accounting principles generally accepted in the United States (“US
GAAP”). Material differences between Canadian and US GAAP and their
effect on the Company’s consolidated financial statements are summarized in the
following tables.
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|
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As
at September 30, 2009
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|
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Consolidated
Balance Sheets
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Total
assets
|
|
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Total
liabilities
|
|
|
Non-Controlling
Interest
|
|
|
Shareholder’s
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Reported
under Canadian GAAP
|
|
$ |
1,008,087 |
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|
$ |
176,980 |
|
|
$ |
6,657 |
|
|
$ |
824,450 |
|
|
Amortization
of non-producing property (a)
|
|
|
(1,208 |
) |
|
|
(338 |
) |
|
|
- |
|
|
|
(870 |
) |
|
Increase in
depletion expense (b)
|
|
|
(15,954 |
) |
|
|
(5,604 |
) |
|
|
- |
|
|
|
(10,350 |
) |
|
Startup
revenues and expenses (c)
|
|
|
681 |
|
|
|
197 |
|
|
|
- |
|
|
|
484 |
|
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Reclassification
non-controlling interests (d)
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|
|
- |
|
|
|
- |
|
|
|
(6,657 |
) |
|
|
6,657 |
|
|
Reported
under US GAAP
|
|
$ |
991,606 |
|
|
$ |
171,235 |
|
|
$ |
- |
|
|
$ |
820,371 |
|
|
|
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December
31, 2008
|
|
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Consolidated
Balance Sheets
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Total
assets
|
|
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Total
liabilities
|
|
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Non-Controlling
Interest
|
|
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Shareholder’s
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Reported
under Canadian GAAP
|
|
$ |
873,383 |
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|
$ |
181,996 |
|
|
$ |
5,746 |
|
|
$ |
685,641 |
|
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Amortization
of non-producing property (a)
|
|
|
(1,271 |
) |
|
|
(356 |
) |
|
|
- |
|
|
|
(915 |
) |
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Increase in
depletion expense (b)
|
|
|
(16,251 |
) |
|
|
(5,713 |
) |
|
|
- |
|
|
|
(10,538 |
) |
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Startup
revenues and expenses (c)
|
|
|
681 |
|
|
|
197 |
|
|
|
- |
|
|
|
484 |
|
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Reclassify
non-controlling interests (d)
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|
|
|
|
|
|
|
|
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(5,746 |
) |
|
|
5,746 |
|
|
Reported
under US GAAP
|
|
$ |
856,542 |
|
|
$ |
176,124 |
|
|
$ |
- |
|
|
$ |
680,418 |
|
|
|
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Three
months ended
September
30
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|
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Nine
months ended
September
30
|
|
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Consolidated
statement of operations
|
|
2009
|
|
|
2008
|
|
|
2009
|
|
|
2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Net
income reported under Canadian GAAP
|
|
$ |
17,375 |
|
|
$ |
6,404 |
|
|
$ |
34,193 |
|
|
$ |
57,918 |
|
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Amortization
of mineral property (a)
|
|
|
82 |
|
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|
77 |
|
|
|
197 |
|
|
|
206 |
|
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Increase in
depletion expense (b)
|
|
|
(334 |
) |
|
|
(521 |
) |
|
|
(1,230 |
) |
|
|
(2,353 |
) |
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Income tax
expense (a) (b)
|
|
|
99 |
|
|
|
168 |
|
|
|
394 |
|
|
|
801 |
|
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Non-controlling
interests (d)
|
|
|
266 |
|
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|
101 |
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|
234 |
|
|
|
1,093 |
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Net
income reported under US GAAP
|
|
$ |
17,488 |
|
|
$ |
6,229 |
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|
$ |
33,788 |
|
|
$ |
57,665 |
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Earnings per
share attributable to Common
|
|
|
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Basic
|
|
$ |
0.20 |
|
|
$ |
0.08 |
|
|
$ |
0.39 |
|
|
$ |
0.72 |
|
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Diluted
|
|
$ |
0.20 |
|
|
$ |
0.08 |
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$ |
0.39 |
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|
$ |
0.71 |
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|
|
|
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|
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|
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|
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Weighted
average number of common shares outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
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|
Basic
|
|
|
87,226 |
|
|
|
80,786 |
|
|
|
86,210 |
|
|
|
80,051 |
|
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Diluted
|
|
|
87,374 |
|
|
|
80,966 |
|
|
|
86,506 |
|
|
|
81,528 |
|
|
|
|
Three
months ended
September
30
|
|
|
Nine
months ended
September
30
|
|
|
Consolidated
summarized statement of cash flows
– US GAAP
|
|
2009
|
|
|
2008
|
|
|
2009
|
|
|
2008
|
|
|
|
|
|
|
|
|
|
|
|
|
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Cash flow
provided by operating activities
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|
$ |
37,099 |
|
|
$ |
22,707 |
|
|
$ |
63,758 |
|
|
$ |
92,965 |
|
|
Cash flow
used in investing activities
|
|
|
(11,844 |
) |
|
|
(36,275 |
) |
|
|
(128,402 |
) |
|
|
(129,627 |
) |
|
Cash flow
provided by (used in) financing activities
|
|
|
2,727 |
|
|
|
(103 |
) |
|
|
103,104 |
|
|
|
49,172 |
|
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Increase
(decrease) in Cash under US GAAP
|
|
$ |
27,982 |
|
|
$ |
(13,671 |
) |
|
$ |
38,460 |
|
|
$ |
12,510 |
|
|
a)
|
Mineral
Property Expenditures
|
Under
Canadian GAAP capitalized costs related to non-producing mineral properties are
only amortized after the commencement of operations. Prior to 2004,
under US GAAP, the Company accounted for mineral rights as intangible
assets, and accordingly mineral rights were amortized on a straight-line basis
over the life of the mineral rights. This resulted in the Company
recording amortization of $1.7 million during 2003 with respect to mining rights
acquired in 2003. The Emerging Issues Task Force (EITF) reached a
consensus “Whether
Mineral Rights
are Tangible or Non-Tangible Assets”. The conclusion is that mineral
rights are tangible assets and should be amortized over the productive life of
the asset. The Company has adopted this new guidance with effect from
2004 on a prospective basis. The change has the affect of reducing
amortization expense in the year ended December 31, 2004 by $1.7 million ($1.1
million net of income taxes). This change will have the effect of conforming
Canadian GAAP to US GAAP.
|
b)
|
Depreciation
and Depletion
|
Under
Canadian GAAP, depletion expense is calculated in reference to proven and
probable reserves and a portion of resources, whereas under US GAAP, depletion
is calculated based on proven and probable reserves only. During the
three months and nine months ended September 30, 2009, the Company calculated an
increase of depletion of $0.2 and $1.0 million, respectively (for the three and
nine months ended September 30, 2008 – $0.5 million and $2.4 million,
respectively), with a corresponding increase to accumulated
depletion. In addition, future income tax liability would decrease by
$0.1 million and $0.4 million, respectively (2008 – $0.2 million and - $0.9
million, respectively), with a corresponding decrease to income tax
expense.
Under
Canadian GAAP, future income taxes are calculated based on enacted or
substantively enacted tax rates applicable to future years. Under US
GAAP, only enacted rates are used in the calculation of future income
taxes. This GAAP difference resulted in no difference in the
financial position, results of operations or cash flows of the Company for the
years presented.
As
of January 1, 2007, the Company adopted, for U.S. GAAP purposes, current
Accounting Standards Codification (“ASC”) updated guidance on Accounting for
Uncertainty in Income Taxes. This guidance clarifies financial
statement recognition and disclosure requirements for uncertain tax positions
taken or expected to be taken in a tax return. Guidance is also
provided on the derecognition of previously recognized tax benefits and the
classification of tax liabilities on the balance sheet. The adoption
of this interpretation did not have a material impact on the Company’s
Consolidated Financial Statements. The Company has not derecognized
any tax benefits or recognized any changes in classification of tax liabilities
in the nine months ending September 30, 2009.
|
d)
|
Non-controlling
Interests
|
In
December 2007, the ASC guidance for non-controlling interests was updated
to establish accounting and reporting standards pertaining to (i)
ownership interests in subsidiaries held by parties other than the
parent
(“non-controlling interest”), (ii) the amount of net income attributable to the
parent and to the non-controlling interest, (iii) changes in a parent’s
ownership interest, and (iv) the valuation of any retained non-controlling
equity investment when a subsidiary is deconsolidated. If a subsidiary is
deconsolidated, any retained non-controlling equity investment in the former
subsidiary is measured at fair value and a gain or loss is recognized in net
income based on such fair value. For presentation and disclosure purposes, the
guidance requires non-controlling interests to be classified as a separate
component of stockholders’ equity. The Company adopted the updated guidance on
January 1, 2009. Except for presentation changes, the adoption had no impact on
the Company’s consolidated financial position, results of operations or cash
flows.
|
e)
|
Other
Comprehensive Income
|
The
ASC issued updated guidance on “Reporting
Comprehensive Income”, which was required to be adopted beginning on
January 1, 1998. This guidance establishes standards for the
reporting and display of comprehensive income (“OCI”) and its components.
Additionally, portfolio investments classified as available-for-sale securities
are recorded at market value. The resulting gain and loss are
included in determination of OCI. The Company adopted Section 1530 on
January 1, 2007 (page 1 note 2c second paragraph) which now aligns treatment of
OCI the same in both US GAAP and Canadian GAAP. The impacts of
available-for-sale securities for the three and nine months ended September 30,
2009 and 2008 are included in the following table:
|
|
Three
months ended
September
30
|
|
Nine
months ended
September
30
|
|
|
|
2009
|
|
2008
|
|
2009
|
|
2008
|
|
|
Net income
under US GAAP
|
|
$ |
17,488 |
|
|
$ |
6,229 |
|
|
$ |
33,788 |
|
|
$ |
57,655 |
|
|
Unrealized
gain on available for sale securities
|
|
|
5,850 |
|
|
|
(1,912 |
) |
|
|
4,731 |
|
|
|
9,401 |
|
|
Comprehensive
net income (loss) under US GAAP
|
|
$ |
23,338 |
|
|
$ |
4,317 |
|
|
$ |
38,519 |
|
|
$ |
67,056 |
|
|
f)
|
Recently
Adopted Accounting
Pronouncements
|
The
Accounting Standards Codification
In
June 2009, the Financial Accounting Standards Board (“FASB”) established the
FASB Accounting Standards Codification (“ASC”) as the single source of
authoritative GAAP to be applied by nongovernmental entities. The ASC is a new
structure which took existing accounting pronouncements and organized them by
accounting topic. Relevant authoritative literature issued by the Securities and
Exchange Commission (“SEC”) and select SEC staff interpretations and
administrative literature was also included in the ASC. All other accounting
guidance not included in the ASC is nonauthoritative. The ASC was effective for
our interim quarterly period beginning July 1, 2009. The adoption of the ASC did
not have an impact on our consolidated financial position, results of operations
or cash flows.
Subsequent
Events
In
May 2009, the ASC guidance for subsequent events was updated to establish
accounting and reporting standards for events that occur after the balance sheet
date but before financial statements are issued or are available to be issued.
The update sets forth: (i) the period after the balance sheet date during which
management of a reporting entity should evaluate events or transactions that may
occur for potential recognition or disclosure in the financial statements, (ii)
the circumstances under which an entity should recognize events or transactions
occurring after the balance sheet in its financial statements, and (iii) the
disclosures that an entity should make about events or transactions occurring
after the balance sheet date in its financial statements. We adopted the updated
guidance for our interim period ended June 30, 2009. The adoption had no impact
on our consolidated financial position, results of operations or cash
flows.
Post-Retirement
Benefit Plans
In
December 2008, the ASC guidance for retirement benefits was updated to expand
the requirements of employers’ disclosures about post-retirement benefit plan
assets in a defined benefit pension or other post-retirement plan. The objective
is to require more detailed disclosures about employers’ plan assets, including
employers’ investment strategies, major categories of plan assets,
concentrations of risk within plan assets, and valuation techniques used to
measure the fair value of plan assets. We adopted the updated guidance on
January 1, 2009. These disclosures are not required for earlier periods that are
presented for comparative purposes.
Equity
Method Investments
In
November 2008, the ASC guidance for equity method and joint venture investments
was updated to clarify the accounting for certain transactions and impairment
considerations involving equity method investments. The intent is to provide
guidance on: (i) determining the initial measurement of an equity method
investment, (ii) recognizing other-than-temporary impairments of an equity
method investment and (iii) accounting for an equity method investee’s
issuance of shares. The updated guidance was effective for our fiscal year
beginning January 1, 2009 and was applied prospectively. The adoption had no
impact on our consolidated financial position or results of
operations.
Equity-Linked
Financial Instruments
In
June 2008, the ASC guidance for derivatives and hedging when accounting for
contracts in an entity’s own equity was updated to clarify the determination of
whether an instrument (or embedded feature) is indexed to an entity’s own stock
which would qualify as a scope exception from hedge accounting. The updated
guidance was effective for our fiscal year beginning January 1, 2009. The
adoption had no impact on our consolidated financial position or results of
operations.
Accounting
for Convertible Debt Instruments
In
May 2008, the ASC guidance was updated for convertible debt instruments that, by
their stated terms, may be settled in cash (or other assets) upon conversion,
including partial cash settlement, unless the embedded conversion option is
required to be separately accounted for as a derivative. The update requires
that the liability and equity components of convertible debt instruments within
the scope be separately accounted for in a manner that reflects the entity’s
nonconvertible debt borrowing rate. This requires an allocation of convertible
debt proceeds between the liability component and the embedded conversion option
(i.e., the equity component). The difference between the principal amount of the
debt and the amount of the proceeds allocated to the liability component is
reported as a debt discount and subsequently amortized to earnings over the
instrument’s expected life using the effective interest method. The updated
guidance required retrospective application to all periods presented. The
adoption had no impact on the Company’s consolidated financial position or
results of operations.
Accounting
for the Useful Life of Intangible Assets
In
April 2008, the ASC guidance for Goodwill and Other Intangibles was updated to
amend the factors that should be considered in developing renewal or extension
assumptions used to determine the useful life of a recognized intangible asset.
The intent of this update is to improve the consistency between the useful life
of a recognized intangible asset and the period of expected cash flows used to
measure the fair value of the asset under guidance for business combinations.
The updated guidance was effective for our fiscal year beginning January 1, 2009
and was applied prospectively to intangible assets acquired after the effective
date. The adoption had no impact on our consolidated financial position, results
of operations or cash flows.
Derivative
Instruments
In
March 2008, the ASC guidance for derivatives and hedging was updated for
enhanced disclosures about how and why an entity uses derivative instruments,
how derivative instruments and the related hedged items are accounted for, and
how derivative instruments and the related hedged items affect an entity’s
financial position, financial performance and cash flows. We adopted the updated
guidance on January 1, 2009. The adoption had no impact on our consolidated
financial position, results of operations or cash flows.
Business
Combinations
In
December 2007, the ASC guidance for business combinations was updated to provide
new guidance for recognizing and measuring identifiable assets and goodwill
acquired, liabilities assumed, and any non-controlling interest in the acquiree.
The updated guidance also provides disclosure requirements to enable users of
the financial statements to evaluate the nature and financial effects of the
business combination. We adopted the updated guidance on January 1, 2009 and.
The adoption of the guidance did not have any impact on the
Company.
In
April 2009, the guidance was updated to address application issues on initial
recognition and measurement, subsequent measurement and accounting, and
disclosure of assets and liabilities arising from contingencies in a business
combination. This update is effective for assets or liabilities arising from
contingencies in business combinations for which the acquisition date is on or
after January 1, 2009. The adoption of the updated guidance did not have any
impact on the Company.
Non-controlling
Interests
In
December 2007, the ASC guidance for Non-controlling Interests was updated to
establish accounting and reporting standards pertaining to: (i) ownership
interests in subsidiaries held by parties other than the parent
(“non-controlling interest”), (ii) the amount of net income attributable to the
parent and to the non-controlling interest, (iii) changes in a parent’s
ownership interest, and (iv) the valuation of any retained non-controlling
equity investment when a subsidiary is deconsolidated. If a subsidiary is
deconsolidated, any retained non-controlling equity investment in the former
subsidiary is measured at fair value and a gain or loss is recognized in net
income based on such fair value. For presentation and disclosure purposes, the
guidance requires non-controlling interests to be classified as a separate
component of equity. We adopted the updated guidance on January 1, 2009. Except
for presentation changes, the adoption had no impact on our consolidated
financial position, results of operations or cash flows.
Variable
Interest Entities
In
June 2009, the ASC guidance for consolidation accounting was updated to require
an entity to perform a qualitative analysis to determine whether the
enterprise’s variable interest gives it a controlling financial interest in a
variable interest entity (“VIE”). This analysis identifies a primary beneficiary
of a VIE as the entity that has both of the following characteristics: (i) the
power to direct the activities of a VIE that most significantly impact the
entity’s economic performance and (ii) the obligation to absorb losses or
receive benefits from the entity that could potentially be significant to the
VIE. The updated guidance also requires ongoing reassessments of the primary
beneficiary of a VIE. The updated guidance is effective for our fiscal year
beginning January 1, 2010.
Fair
Value Accounting
In
September 2006, the ASC guidance for fair value measurements and disclosure was
updated to define fair value, establish a framework for measuring fair value,
and expand disclosures about fair value measurements. We adopted the updated
guidance for assets and liabilities measured at fair value on a recurring basis
on January 1, 2008. In February 2008, the FASB staff issued an update to the
guidance which delayed the effective date for nonfinancial assets and
nonfinancial liabilities that are recognized or disclosed at fair value in the
financial statements on a nonrecurring basis. We adopted the updated guidance
for our nonfinancial assets and liabilities measured at fair value on a
nonrecurring basis on January 1, 2009.
In
April 2009, the guidance was further updated to provide additional guidance on
determining fair value when the volume and level of activity for the asset or
liability have significantly decreased and identifying circumstances that
indicate when a transaction is not orderly. In April 2009, the guidance for
investments in debt and equity securities was updated to: (i) clarify the
interaction of the factors that should be considered when determining whether a
debt security is other than temporarily impaired, (ii) provide guidance on the
amount of an other-than-temporary impairment recognized for a debt security in
earnings and other comprehensive income and (iii) expand the disclosures
required for other-than-temporary impairments for debt and equity securities.
Also in April 2009, the guidance for financial instruments was updated to
require disclosures about the fair value of financial instruments for interim
reporting periods of publicly traded companies as well as in annual financial
statements. Adoption of this updated guidance was required for our interim
reporting period beginning April 1, 2009 with early adoption permitted. We
adopted the updated guidance for the interim period ended March 31, 2009. See
tables below for the required disclosure.
In August 2009,
the ASC guidance for fair value measurements and disclosure was updated to
further define fair value of liabilities. This update provides clarification for
circumstances in which: (i) a quoted price in an active market for the identical
liability is not available, (ii) the liability has a restriction that prevents
its transfer, and (iii) the identical liability is traded as an asset in an
active market in which no adjustments to the quoted price of an asset are
required. The updated guidance is effective for our interim reporting period
beginning October 1, 2009. We are evaluating the potential impact of adopting
this guidance on our consolidated financial position, results of operations and
cash flows.
The
updated guidance establishes a fair value hierarchy that prioritizes the inputs
to valuation techniques used to measure fair value. The hierarchy gives the
highest priority to unadjusted quoted prices in active markets for identical
assets or liabilities (Level 1 measurements) and the lowest priority to
unobservable inputs (Level 3 measurements). The three levels of the fair value
hierarchy under this guidance are described below:
|
Level
1
|
Unadjusted
quoted prices in active markets that are accessible at the measurement
date for identical, unrestricted assets or
liabilities;
|
|
Level
2
|
Quoted prices
in markets that are not active, or inputs that are observable, either
directly or indirectly, for substantially the full term of the asset or
liability;
|
|
Level
3
|
Prices or
valuation techniques that require inputs that are both significant to the
fair value measurement and unobservable (supported by little or no market
activity).
|
The
following table sets forth the Company’s financial assets and liabilities
measured at fair value by level within the fair value hierarchy. As required by
the guidance, assets and liabilities are classified in their entirety based on
the lowest level of input that is significant to the fair value
measurement.
|
|
|
Fair
Value at September 30, 2009
|
|
|
(in thousands
of US dollars)
|
|
Total
|
|
|
Level
1
|
|
|
Level
2
|
|
|
Level
3
|
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$ |
65,249 |
|
|
$ |
65,249 |
|
|
$ |
- |
|
|
$ |
- |
|
|
Short-term
investments
|
|
|
84,198 |
|
|
|
84,198 |
|
|
|
|
|
|
|
- |
|
|
Investments
|
|
|
1,166 |
|
|
|
1,166 |
|
|
|
|
|
|
|
- |
|
|
Unrealized
gain on commodity and foreign currency contracts
|
|
|
2,388 |
|
|
|
|
|
|
|
2,388 |
|
|
|
- |
|
|
Trade
receivable from provisional concentrate sales, net
|
|
|
43,112 |
|
|
|
|
|
|
|
43,112 |
|
|
|
|
|
|
|
|
$ |
196,113 |
|
|
$ |
150,613 |
|
|
$ |
45,500 |
|
|
$ |
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized
loss on commodity and foreign currency contracts
|
|
$ |
2,175 |
|
|
$ |
- |
|
|
$ |
2,175 |
|
|
$ |
- |
|
|
|
|
$ |
2,175 |
|
|
$ |
- |
|
|
$ |
2,175 |
|
|
$ |
- |
|
The
Company’s cash instruments are classified within Level 1 of the fair value
hierarchy because they are valued using quoted market prices. The cash
instruments that are valued based on quoted market prices in active markets are
primarily money market securities and U.S. Treasury securities.
The
Company’s short-term investments and other investments are valued using quoted
market prices in active markets and as such are classified within Level 2 of the
fair value hierarchy. The fair value of the investment securities is calculated
as the quoted market price of the investment equity security multiplied by the
quantity of shares held by the Company.
The
Company’s trade receivable from provisional concentrate sales is valued using
quoted market prices based on the forward London Metal Exchange (“LME”) (copper)
(zinc) and (lead) and the London Bullion Market Association P.M. fix (“London
P.M. fix”) (gold) (silver) and as such is classified within Level 1 of the fair
value hierarchy.
The
Company’s unrealized gains and losses on commodity and foreign currency
contracts are valued using quoted market prices in active markets and as such
are classified as level 1 of the fair market value hierarchy.
The
total amount of unrealized losses on Available for Sale Securities for the
period was included in Accumulated
other comprehensive income as a result of changes in market values and
foreign exchange rates from December 31, 2007.
|
g)
|
Recent
Accounting Pronouncements
|
Variable
Interest Entities
In
June 2009, the FASB issued ASC guidance that requires an entity to perform a
qualitative analysis to determine whether the enterprise’s variable interest
gives it a controlling financial interest in a variable interest entity (“VIE”).
This analysis identifies a primary beneficiary of a VIE as the entity that has
both of the following characteristics: i) the power to direct the activities of
a VIE that most significantly impact the entity’s economic performance and ii)
the obligation to absorb losses or receive benefits from the entity that could
potentially be significant to the VIE. This guidance also will require ongoing
reassessments of the primary beneficiary of a VIE. The new guidance is effective
for the Company’s fiscal year beginning January 1, 2010. The Company
currently is evaluating the potential impact of adopting this statement on the
Company’s consolidated financial position, results of operations and cash
flows.
Transfers
of Financial Assets
In
June 2009, the ASC guidance,
“Accounting for Transfers of Financial Assets”, was updated to require
entities to provide more information regarding sales of securitized financial
assets and similar transactions, particularly if the entity has continuing
exposure to the risks related to transferred financial assets. The guidance
eliminates the concept of a “qualifying special-purpose entity,” changes the
requirements for derecognizing financial assets and requires additional
disclosures. The updated guidance is effective for fiscal years beginning after
November 15, 2009. Adoption of this guidance is not expected to have a
material impact on our consolidated financial statements.
Fair
Value Accounting for Liabilities
In
August 2009, the FASB issued updates to fair value accounting for
liabilities. These changes clarify existing guidance that in
circumstances in which a quoted price in an active market for the identical
liability is not available, an entity is required to measure fair value using
either a valuation technique that uses a quoted price of either a similar
liability or a quoted price of an identical or similar liability when traded as
an asset, or another valuation technique that is consistent with the principles
of fair value measurements, such as an income approach (e.g., present value
technique). This guidance also states that both a quoted price in an
active market for the identical liability and a quoted price for the identical
liability when traded as an asset in an active market when no adjustments to the
quoted price of the asset are required are Level 1 fair value
measurements. These changes will become effective for the Company’s
financial statements for the year ended December 31, 2009. The
Company has not determined the impact that this update may have on its
consolidated financial statements.
Accounting
for Investments-Equity Method and Joint Ventures and Accounting for Equity-Based
Payments to Non-Employees
In
September 2009, the FASB issued the FASB Accounting Standards Update No.
2009-09 “Accounting for Investments-Equity Method and Joint Ventures and
Accounting for Equity-Based Payments to Non-Employees”. This update
represents a correction to Section 323-10-S99-4, Accounting by an Investor for
Stock-Based Compensation Granted to Employees of an Equity Method Investee.
Additionally, it adds observer comment Accounting Recognition for Certain
Transactions Involving Equity Instruments Granted to Other Than Employees to the
Codification. The Company has not determined the impact that this update
may have on its consolidated financial
statements.
SIGNATURES
Pursuant to the requirements of the
Securities Exchange Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly
authorized.
|
|
PAN
AMERICAN SILVER CORP
|
|
|
(Registrant)
|
|
Date:
|
|
February
5, 2010
|
|
By:
|
/s/
Robert Pirooz
|
|
|
Name:
Robert Pirooz
Title: General Counsel, Secretary and
Director
|