IFRS 6 which deals with the accounting for exploration for, and evaluation of, mineral resources, which deals with somewhat limited issues, and the IASB, assisted by a task force consisting of national standard setters, has continued to examine other related matters.
Ongoing research is considering all issues associated with accounting for “upstream” extractive activities. Specifically, this is intended to address the treatment of:
- Reserves/resources—which will include determining whether:
- Reserves/resources can or should be recognized as assets on the statement of financial position;
- Predevelopment costs incurred following the discovery of reserves/resources should be capitalized or expensed if reserves/resources are not recognized;
- Predevelopment costs incurred prior to the discovery of reserves/resources should be capitalized or expensed; and
- Reserves/resources information should be disclosed—and if so, what ...