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Commission Regulation
(EC) No 1910/2005 of 08 November 2005
amending
Regulation (EC) No 1725/2003.
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Measurement of Exploration and Evaluation Assets
Measurement at
recognition
8. Exploration
and evaluation assets shall be measured at cost.
Elements of cost of exploration and evaluation
assets
9. An entity
shall determine a policy specifying which expenditures
are recognised as exploration and evaluation assets and
apply the policy consistently. In making this
determination, an entity considers the degree to which
the expenditure can be associated with finding specific
mineral resources. The following are examples of
expenditures that might be included in the initial
measurement of exploration and evaluation assets (the
list is not exhaustive):
(a)
acquisition of rights to explore;
(b)
topographical, geological, geochemical and
geophysical studies;
(c)
exploratory drilling;
(d)
trenching;
(e)
sampling; and
(f)
activities in relation to evaluating the technical
feasibility and commercial viability of extracting a
mineral resource.
10.
Expenditures related to the development of mineral
resources shall not be recognised as exploration and
evaluation assets. The Framework and IAS 38 Intangible
Assets provide guidance on the recognition of assets
arising from development.
11. In
accordance with IAS 37 Provisions, Contingent
Liabilities and Contingent Assets an entity recognises
any obligations for removal and restoration that are
incurred during a particular period as a consequence of
having undertaken the exploration for and evaluation of
mineral resources.
Measurement
after recognition
12. After
recognition, an entity shall apply either the cost model
or the revaluation model to the exploration and
evaluation assets. If the revaluation model is applied
(either the model in IAS 16 Property, Plant and
Equipment or the model in IAS 38) it shall be consistent
with the classification of the assets (see paragraph
15).
Changes in
accounting policies
13. An
entity may change its accounting policies for
exploration and evaluation expenditures if the change
makes the financial statements more relevant to the
economic decision-making needs of users and no less
reliable, or more reliable and no less relevant to those
needs. An entity shall judge relevance and reliability
using the criteria in IAS 8.
14. To justify
changing its accounting policies for exploration and
evaluation expenditures, an entity shall demonstrate
that the change brings its financial statements closer
to meeting the criteria in IAS 8, but the change need
not achieve full compliance with those criteria.
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