Wiley Interpretation and Application of IFRS Standards

32Extractive Industries

1. Introduction
2. Definitions of Terms
3. Exploration and Evaluation of Mineral Resources
   1. Background
   2. IFRS 6 in Greater Detail
   3. Cash-Generating Units for Exploration and Evaluation Assets
4. Assets Subject to IFRS 6
   1. Categorisation
   2. Availability of Cost or Revaluation Models
   3. Financial Statement Classification
   4. Disclosure Requirements Under IFRS 6
5. Example of Financial Statement Disclosures
6. IFRIC 20 Stripping Cost in the Production Phase of a Surface Mine
7. Example of Financial Statement Disclosures
8. Future Developments
   1. Extractive Industry Discussion Paper
9. US GAAP Comparison

Introduction

IFRS 6 deals with the accounting of exploration for, and the evaluation of, mineral resources. In April 2010, the IASB published the results of an international research project on a possible future IFRS for extractive activities in the form of a discussion paper—Extractive Activities. This chapter reports both on IFRS 6 and possible future developments. However, the IASB has paused the project and moved extractive activities to an inactive phase they are not currently working on.

IFRS 6 does not address other aspects of accounting by entities engaged in the exploration for and evaluation of mineral resources. An entity shall not apply IFRS 6 to expenditures incurred:

1. Before the exploration for and evaluation of mineral resources, such as expenditures incurred before the entity has obtained the legal rights to explore a specific area;
2. After the technical feasibility and commercial ...