Exploration and evaluation assets are initially measured at a. cost. b. revalued amount. c. fair value. d. a or b
1. Exploration and evaluation assets are initially measured at
a. cost.
b. revalued amount.
c. fair value.
d. a or b
2. Exploration and evaluation assets are exploration and evaluation expenditures recognized as
a. assets in accordance with the entity’s accounting policy.
b. expenses in accordance with applicable PFRSs.
c. assets in accordance with (a) above, subject to the limitations provided under PAS 8 Accounting Policies, Changes in Accounting Estimates and Errors.
d. any of these
Use the following information for the next two questions:
In 20x1, OBSTREPEROUS NOISY Mining Corp. acquired the right to use 1,000 acres of land to mine for gold. The lease cost is ₱200,000,000, and the related exploration costs on the property amounted to ₱40,000,000. It is the policy of OBSTREPEROUS Mining Corp. to capitalize all costs of exploration and evaluation of mineral resources. Intangible development costs of drilling, tunnels, shafts, and wells incurred before opening the mine amounted to ₱340,00,000. At the end of the mine’s economic useful life, OBSTREPEROUS Mining Corp. is required by legislation to restore the site. Estimated restoration costs have a fair value of ₱20,000,000. OBSTREPEROUS Mining Corp. estimates that the mine will provide approximately 100,000,000 ounces of gold. Actual ounce of gold mined in 20x2 totaled 300,000 ounces.
3.How much is the depletion charge in 20x2?
4. Assuming that of the 300,000 ounces of gold extracted in 20x2, 280,000 ounces were sold and 20,000 ounces remain in inventory. How much depletion is recognized in the 20x2 (a)
Statement of financial position ______________________
Statement of profit or loss ______________________
Use the following information for the next two questions:
In 20x1, BUCOLIC RURAL Co. acquired land for a total cost of ₱40,000,000 to be used to quarry marble, limestone, and construction aggregates. Costs incurred to obtain legal right to explore the property amounted to ₱8,000,000. Expenditures incurred in the exploration for and evaluation of mineral resources before technical feasibility and commercial viability of extracting a mineral resource are demonstrable totaled ₱12,000,000. Intangible development costs of drilling, tunnels, shafts, and wells before the actual production totaled ₱20,000,000. BUCOLIC Co. estimates that
Actual units quarried in 20x1 through 20x4 totaled 30,000,000 units. On January 1, 20x5, BUCOLIC Co. estimated that the remaining recoverable reserves are only 25,000,000 units and after the reserves are exhausted, the land will be sold for ₱3,200,000. Costs of disposal are estimated at ₱1,200,000. Actual units quarried in 20x5 totaled 6,000,000 units.
5.How much is the depletion charge in 20x5?
6.What is the carrying amount of the wasting asset on December 31, 20x5?
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