Editorial Note Issue date IFRS 6 Exploration for and Evaluation of Mineral Resources (2004) was originally issued in December 2004, effective from 1 January 2006. All effective amendments issued since that date are reflected in the text of the standard. Detailed editorial notes set out the history of major amendments, and prospective amendments not yet effective. Key
amendments The standard incorporates the following amendments that are already effective: Need help? Get subscribed!To subscribe to this content, simply call 0800 231 5199 We can create a package that’s catered to your individual needs. Or book a demo to see this product in action. History of IFRS 6
Related Interpretations
Amendments under consideration by the IASB
Summary of IFRS 6DefinitionsExploration for and evaluation of mineral resources means the search for mineral resources, including minerals, oil, natural gas and similar non-regenerative resources after the entity has obtained legal rights to explore in a specific area, as well as the determination of the technical feasibility and commercial viability of extracting the mineral resource. [IFRS 6.Appendix A] Exploration and evaluation expenditures are expenditures incurred in connection with the exploration and evaluation of mineral resources before the technical feasibility and commercial viability of extracting a mineral resource is demonstrable. [IFRS 6.Appendix A] Accounting policies for exploration and evaluationIFRS 6 permits an entity to develop an accounting policy for recognition of exploration and evaluation expenditures as assets without specifically considering the requirements of paragraphs 11 and 12 of IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors. [IFRS 6.9] Thus, an entity adopting IFRS 6 may continue to use the accounting policies applied immediately before adopting the IFRS. This includes continuing to use recognition and measurement practices that are part of those accounting policies. ImpairmentIFRS 6 effectively modifies the application of IAS 36 Impairment of Assets to exploration and evaluation assets recognised by an entity under its accounting policy. Specifically:
Presentation and disclosureAn entity treats exploration and evaluation assets as a separate class of assets and make the disclosures required by either IAS 16 Property, Plant and Equipment or IAS 38 Intangible Assets consistent with how the assets are classified. [IFRS 6.25] IFRS 6 requires disclosure of information that identifies and explains the amounts recognised in its financial statements arising from the exploration for and evaluation of mineral resources, including: [IFRS 6.23–24]
Special IAS Plus Newsletter explaining IFRS 6On 31 January 2005, Deloitte's IFRS Global Office published a special edition of our IAS Plus Newsletter titled IFRS 6 Exploration for and Evaluation of Mineral Resources. How are exploratory and evaluation assets classified on the statement of financial position?Exploration and evaluation assets shall be measured at cost at recognition. After recognition, an entity shall apply either the cost model or the revaluation model to the assets. The assets shall be classified as tangible or intangible according to the nature of the assets acquired.
What are exploration and evaluation expenditures?Typical examples of expenditures that might be included in the initial measurement of exploration and evaluation assets include: exploratory drilling; sampling; trenching; topographical, geographical and geophysical studies; and other activities specific to evaluating the technical feasibility and commercial viability ...
Which type of expenditure is included in exploration and evaluation of mineral resources?IFRS 6 applies to exploration and evaluation expenditures, i.e. to expenditures incurred by an entity in connection with the exploration for and evaluation of mineral resources (including minerals, oil, natural gas and similar non-regenerative resources).
Should exploration and evaluation costs be Capitalised?Expenditure incurred before exploration and evaluation begins cannot be capitalised, for example, costs incurred before the entity has obtained legal rights to explore an area.
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