When is an entity required to recognize exploration

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Reference no: EM132805659

Problem 1: Exploration and Evaluation expenditures are incurred

a. When searching for an area that may warrant detailed exploration even though the entity has not yet obtained the legal rights to explore a specific area.

b. When the legal right to explore a specific area has been obtained but the technical feasibility and commercial viability of extracting mineral resource are not yet demonstrable

c. When a specific area is being developed and preparations for commercial extraction are being made

d. In extracting mineral resource and processing the resource to make it marketable or transportable

Problem 2: When is an entity required to recognize exploration and evaluation expenditure as an asset?

a. When such expenditure is recoverable in future periods

b. When the technical feasibility and commercial viability of extracting the associated mineral resource have been demonstrated.

c. When required by the entity's accounting policy for recognizing exploration and evaluation asset.

d. Such expenditure is always expensed as incurred.

Reference no: EM132805659

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