IFRS 6 Exploration for and Evaluation of Mineral Resources
• Issued in December 2004
• Recent amendment: by IAS 1 revised in September 2007
What is an exploration and evaluation expenditure?
• an expenditure incurred for the exploration and evaluation of mineral resources
• such expenditures recognised as an asset is called an exploration and evaluation asset
Measurement at recognition
• exploration and evaluation assets are measured at cost
Measurement after recognition
• choose one of the following models:
(1) cost model
(2) revaluation model
Cost model:
• carrying amount = cost - accumulated depreciation - accumulated impairment losses
Revaluation model
• carrying amount = revalued amount
Revalued amount = fair value at the date of revaluation - subsequent accumulated –depreciation - subsequent accumulated impairment losses
• Exploration and evaluation assets classified as tangible or intangible reflecting the nature of assets
• Indication of impairment rules of IFRS 6 is different from those of IAS 36
• Impairment test rules of IAS 36 are applied
• Recognition of impairment loss rules of IAS 36 are applied
IFRS 6 Disclosures
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
(i) its accounting policies for exploration and evaluation expenditures including the recognition of exploration and evaluation assets.
(ii) the amounts of assets, liabilities, income and expense and operating and investing cash flows arising from the exploration for and evaluation of mineral resources.
