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Which component of mineral rights accounting requires immediate expense recognition?

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?

Which?

What is the purpose of charging depreciation in financial statements? A To allocate the cost of a non-current asset over the accounting periods expected to benefit from its use B To ensure that funds are available for the eventual replacement of the asset C To reduce the cost of the asset in the statement of financial position to its estimated market value D To account for the ‘wearing-out’ of the asset over its life

From the Fundamentals of Oil and Gas Accounting; Which oil and gas assets are subject to impairment testing for successful effort companies?

Solve

Question 1. For any single intangible asset that is material to an entity's financial statements, which of the following is required to be disclosed? Select all that apply. A. Remaining amortisation period of the intangible asset B. Carrying amount of the intangible asset C. Line item on the income statement whichtotal amortization is included D. Description of the intangible asset

Access the FASB Accounting Standards Codification at the FASB website (asc.fasb.org). Determine the specific citation for each of the following items: 1. The disclosure requirements in the notes to the financial statements for depreciation on property, plant, and equipment. 2. The criteria for determining commercial substance in a nonmonetary exchange. 3. The disclosure requirements for interest capitalization. 4. The elements of costs to be included as R&D activities.

Which one of the following disclousures is required by generally accepted accounting principle? a. Depreciation expense for each major class of asset b. Balances of major classes of depreciable assets, by nature or function c. Accumulated depreciation on each depreciable asset d. An explanation of why the depreciation method used was selected by management

Which of the following is not a condition that must be satisfied before interest capitalization can begin on a qualifying asset? A) Activities that are necessary to get the asset ready for its intended use are in progress.                                                                                                         B) The interest rate is equal to or greater than the company's cost of capital. C) Interest cost is being incurred.                                                                      D) Expenditures for the assets have been made.

Which of the following contingencies is usually accrued?   A risk of loss from fire B discovery of possible mineral reserves on company property C bad debts D expected proceeds from insurance settlement

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.

Which of the following is not a condition that must be satisfied before interest capitalization can begin on a qualifying asset?                          Interest cost is being incurred. Expenditures for the assets have been made. The interest rate is equal to or greater than the company's cost of capital. Activities that are necessary to get the asset ready for its intended use are in progress.

How do businesses account for depletion of natural resources? What is the relevant AASB regarding natural resources and what is the intention of the standard setter? Do you think natural resources should be treated as depreciable assets - why /why not? Discuss