Which type of expenditure is included in the term "exploration and evaluation" of mineral resources
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- Discuss and explain If an entity is considering revaluing its exploration and evaluation assets, would the revaluation increase the ‘relevance’ of the information from the perspective of the readers of the financial statements? Further, provide explanation for capitalising the expenses at evaluation and exploration stage also restoration of a oil extraction project. Provide reference, if possible. please.For entities that report using IFRS, how are exploration and evaluation assets subsequently measured? Question 18 options: a) Using the cost or revaluation model. b) Using the cost model or fair value model. c) Using the cost model. d) Using the cost model or depreciation model.King Mine Corp., a publicly accountable entity, is determining the technical feasibility of extraction of mineral resources. How would the company account for the costs incurred? Question 14 options: a) Work is preliminary and experimental, so costs must be expensed. b) Costs can be capitalized as exploration and evaluation costs, or expensed. c) Costs must be capitalized as property, plant, and equipment. d) Costs must be capitalized as inventory.
- Under IFRS, a company that acquires an intangible asset may use the revaluation model for subsequent measurement only if a. The useful life of the intangible asset can be readily determined. b. An active market exists for the intangible asset. c. The cost of the intangible asset can be measured reliably. d. The intangible asset is a monetary asset.provide explanation for capitalising the expenses at evaluation and exploration stage also restoration of a oil extraction project.Which of the following statements is correct? Question 1 options: a Some intangible assets have physical substance b Intangible assets are always classified as noncurrent assets even in cases where they are part of a disposal group. c The process of recording the expiration of the economic benefits of an intangible asset is called depletion. d Intangible assets can be obtained in one of two ways – external acquisition or internal development
- An entity that acquires an intangible asset may use the revaluation modelfor subsequent measurement only if A. The useful life of the intangible asset can be reliably determined.B. An active market exists for the intangible asset.C. The cost of the intangible asset can be measured reliably.D. The intangible asset is a monetary asset.Exploration for and evaluation of mineral resources is the search for mineral resources before the entity has obtained legal rights to explore in a specific area. the search for mineral resources after the entity has obtained legal rights to explore in a specific area. the search for mineral resources before the entity has obtained legal rights to explore in a specific area up to the date when mineral resources are actually confirmed to exist in the area. the search for mineral resources after the entity has obtained legal rights to explore in a specific area up to the date when commercial operations begin. According to PFRS 6 Exploration for and Evaluation of Mineral Resources, an entity may change its accounting policies for exploration and evaluation expenditures if the change makes the financial statements more relevant and more reliable. the PFRSs do not prohibit the change the change makes the financial statements more relevant and no less reliable, or more reliable and…Which of the following is least likely capitalized as cost of land? Grading, filling, draining clearing and similar site development activities Survey Landscaping and similar improvements that have limited useful lives. Special assessment Subsequent to initial recognition, an entity shall use this model to account for its items of property, plant and equipment. cost model revaluation model fair value model Cost model or revaluation model as an accounting policy choice It is the systematic allocation of the depreciable amount of an asset over its estimated useful life. Depreciation Impairment Revaluation all of these
- IFRS GAAP and U.S. GAAP agree most of the time. In which instance might their disagreement have a big impact on an investment decision? A. revenue recognition B. goodwill C. plant, property and equipment D. accelerated depreciationUnder IFRS, research must be expensed but some development expenditures may be capitalized. To capitalize development expenditures, firms must demonstrate several factors that include all of the following except: Multiple Choice technical feasibility. length of time the intangible asset is expected to provide benefits. ability to use or sell the asset. how the intangible asset will generate probable future economic benefits.Explain the situation that a company (in the extractive industry) expenses all exploration and evaluation expenditure as incurred. Would the related financial reports provide ‘relevant’ information?