This allows an entity to apply an accounting policy for exploration and evaluation assets which is relevant and reliable, even though the policy may not be in full compliance with the Conceptual Framework. Subsequent costs incurred during the exploration and evaluation phase should be capitalised in accordance with this same policy. Answers: 1(d), 2(c), 3(a), Virtual classroom support for learning partners, Diploma in International Financial Reporting, IFRS 6, exploration for and evaluation of mineral resources, be relevant to the decision-making needs of users. 2 PwC | IFRS overview 2019 Contents Introduction 4 Accounting rules and principles 5 Accounting principles and applicability of IFRS 6 First-time adoption of IFRS – IFRS 1 7 Presentation of financial statements – IAS 1 8 Accounting policies, accounting estimates and errors – IAS 8 10 Fair value – IFRS … Ind AS 115. The costs capitalised under IFRS 6 might not meet the Conceptual Framework definition of an asset because, for example, the capitalisation criteria followed might not require the demonstration of present economic resource. Subsequently, cost or the revaluation model, as described in IAS 16 and IAS 38. However, some companies have used the ‘full cost’ approach, where all costs are capitalised. Get step-by-step explanations, verified by experts. The IASB accepted these arguments and therefore issued IFRS 6. Winner of the Standing Ovation Award for “Best PowerPoint Templates” from Presentations Magazine. Construction Contracts. A principal purpose of IFRS 6 is to specify the circumstances in which entities should test exploration and evaluation costs for impairment, and when to require disclosure of information about such assets. IFRS 1 First-time Adoption of International Financial Reporting Standards sets out the procedures that an entity must follow when it adopts IFRSs for the first time as the basis for preparing its general purpose financial statements. Once the technical and commercial feasibility of extracting a mineral resource has been demonstrated, the assets fall outside IFRS 6 and are reclassified according to other IFRS Standards. 3. IFRS 5. Japan is working to achieve convergence of IFRS and began permitting certain qualifying Recognised exploration and evaluation assets should be classified as either tangible or intangible assets under IFRS 6. The assets are tested for impairment in accordance with IAS 36, subject to certain special requirements. Most of the major entities in this sector use the ‘successful efforts’ method, where the costs incurred in finding, acquiring, and developing reserves are capitalised on a ‘field by field’ basis. D A decision to discontinue exploration and evaluation activities in the specific area when those activities have not led to the discovery of commercially-viable quantities of mineral resources U.S. Generally Accepted Accounting Principles (GAAP) is only used in the United States. PowerPoint Presentations (the PowerPoint Viewer has been retired) Solutions Manual (the Word Viewer has been retired) Chapter 36: Specialized Industries and Hyperinfl ation: IFRS 4, IAS 26, IAS 29 IFRS 16 requires different and more extensive disclosures about leasing activities than IAS 17. A Lack of sufficient data to determine whether the carrying amount of the exploration and evaluation asset is likely to be recovered in full from successful development or by sale B The expiration of the period for which the entity has the right to explore in the specific area, unless the right is expected to be renewed The IFRS Supplement 2020 published in December 2019 brings the manual up to date for 2020; it includes a new chapter on insurance contracts under IFRS 17 and an updated chapter on leasing under IFRS 16. Canada adopted IFRS, in full, on Jan. 1, 2011. Assets recognised in respect of licences and surveys should therefore be classified as intangible assets. At one end, IFRS 6®, Exploration for and evaluation of mineral resources has introduced certain issues for the industry, and, at the other, IFRS Standards is shifting the boundaries of cash-generating units down to the level of the petrol station or smallest group of retailing assets under IAS 36®, Impairment of assets. 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