Debt Accounting Policy
Capitalized Interest
Barrick capitalizes interest costs for qualifying assets. Qualifying assets are assets that require a significant amount of time to prepare for their intended use, including projects that are in the exploration and evaluation, development or construction stages. Qualifying assets also include significant expansion projects at Barrick's operating mines. Capitalized interest costs are considered an element of the historical cost of the qualifying asset. Capitalization ceases when the asset is substantially complete or if construction is interrupted for an extended period. Where the funds used to finance a qualifying asset form part of general borrowings, the amount capitalized is calculated using a weighted average of rates applicable to the relevant borrowings during the period. Where funds borrowed are directly attributable to a qualifying asset, the amount capitalized represents the borrowing costs specific to those borrowings. Where surplus funds available out of money borrowed specifically to finance a project are temporarily invested, the total capitalized interest is reduced by income generated from short-term investments of such funds.
Source: Barrick Gold Corp., Annual Report
Total Debt Disclosure
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Barrick Gold Corp., Statement of Financial Position, Debt
| Item |
Description |
The company |
| Total debt |
Sum of the carrying values as of the balance sheet date of all debt plus capital lease obligations. |
Barrick Gold Corp.'s total debt increased from 2009 to 2010 and from 2010 to 2011.
|
Interest Costs Incurred
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Barrick Gold Corp.
Source: Based on data from Barrick Gold Corp., Annual Reports
| Item |
Description |
The company |
| Interest expense |
Represents the portion of interest incurred in the period on debt arrangements that was charged against earnings. |
Barrick Gold Corp.'s interest expense increased from 2009 to 2010 and from 2010 to 2011.
|
| Interest capitalized |
The amount of interest that was capitalized during the period. |
Barrick Gold Corp.'s interest capitalized increased from 2009 to 2010 and from 2010 to 2011.
|
| Interest costs incurred |
Total interest costs incurred during the period and either capitalized or charged against earnings. |
Barrick Gold Corp.'s interest costs incurred increased from 2009 to 2010 and from 2010 to 2011.
|
Adjusted Interest Coverage Ratio
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2011 Calculations
| Ratio |
Description |
The company |
| Adjusted interest coverage ratio |
A solvency ratio calculated as EBIT divided by interest payments (including capitalized interest). |
Barrick Gold Corp.'s adjusted interest coverage ratio improved from 2009 to 2010 and from 2010 to 2011.
|
