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Exploration for and Evaluation of Mineral Resources

Exploration for and Evaluation of Mineral Resources - Ind AS - 106 - B. Indian Accounting Standards (Ind AS) - Companies Law - Ind AS - 106 - Indian Accounting Standard (Ind AS) 106 Exploration for and Evaluation of Mineral Resources (This Indian Accounting Standard includes paragraphs set in bold type and plain type, which have equal authority. Paragraphs in bold type indicate the main principles.) Objective 1 The objective of this Indian Accounting Standard (Ind AS) is to specify the financial .....

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l statements arising from the exploration for and evaluation of mineral resources and help users of those financial statements understand the amount, timing and certainty of future cash flows from any exploration and evaluation assets recognised. Scope 3 An entity shall apply this Ind AS to exploration and evaluation expenditures that it incurs. 4 This Ind AS does not address other aspects of accounting by entities engaged in the exploration for and evaluation of mineral resources. 5 An entity s .....

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gnising exploration and evaluation assets shall apply paragraph 10 of Ind AS 8, Accounting Policies, Changes in Accounting Estimates and Errors. 7 Paragraphs 11 and 12 of Ind AS 8 specify sources of authoritative requirements and guidance that management is required to consider in developing an accounting policy for an item if no Accounting Standard applies specifically to that item. Subject to paragraphs 9 and 10 below, this Accounting Standard exempts an entity from applying those paragraphs t .....

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onsiders 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 .....

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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 Ind AS 16, Proper .....

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eria in Ind AS 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 Ind AS 8, but the change need not achieve full compliance with those criteria. Presentation Classification of exploration and evaluation assets 15 An entity shall classify exploration and evaluation assets as tangible or intangible according to the nature of the assets acquired a .....

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f exploration and evaluation assets 17 An exploration and evaluation asset shall no longer be classified as such when the technical feasibility and commercial viability of extracting a mineral resource are demonstrable. Exploration and evaluation assets shall be assessed for impairment, and any impairment loss recognised, before reclassification. Impairment Recognition and measurement 18 Exploration and evaluation assets shall be assessed for impairment when facts and circumstances suggest that .....

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en identifying an exploration and evaluation asset that may be impaired. Paragraph 20 uses the term assets but applies equally to separate exploration and evaluation assets or a cash-generating unit. 20 One or more of the following facts and circumstances indicate that an entity should test exploration and evaluation assets for impairment (the list is not exhaustive): (a) the period for which the entity has the right to explore in the specific area has expired during the period or will expire in .....

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opment in the specific area is likely to proceed, the carrying amount of the exploration and evaluation asset is unlikely to be recovered in full from successful development or by sale. In any such case, or similar cases, the entity shall perform an impairment test in accordance with Ind AS 36. Any impairment loss is recognised as an expense in accordance with Ind AS 36. Specifying the level at which exploration and evaluation assets are assessed for impairment 21 An entity shall determine an ac .....

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irment may comprise one or more cash-generating units. Disclosure 23 An entity shall disclose information that identifies and explains the amounts recognised in its financial statements arising from the exploration for and evaluation of mineral resources. 24 To comply with paragraph 23, an entity shall disclose: (a) its accounting policies for exploration and evaluation expenditures including the recognition of exploration and evaluation assets. (b) the amounts of assets, liabilities, income and .....

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