(Summary) Ind AS 106
Exploration for and Evaluation of
Is to specify the financial reporting for the exploration for and evaluation of mineral resources.
Applies to exploration and evaluation expenditures that it incurs.
- Exploration and evaluation assets (EEA)
- Exploration and evaluation expenditures
- Exploration for and evaluation of mineral resources
Exploration and evaluation expenditures: Expenditures incurred by an entity in connection with the exploration for and evaluation of mineral resources before the technical feasibility and commercial viability of extracting a mineral resource are demonstrable.
EEA shall be measured at cost.
Classify EEA as Tangible or Intangible
An EEA shall no longer be classified as such when the technical feasibility and commercial viability of extracting a mineral resource are demonstrable.
EEA shall be assessed for impairment, and any impairment loss recognised, before reclassification.
EEA shall be assessed for impairment when facts and circumstances suggest that its carrying amount may exceed its recoverable amount.
Facts indicating impairment:
Following facts indicate that entity should test the assets for impairment:
- The period for which the entity has the right to explore in the specific area has expired during the period or will expire in the near future, and is not expected to be renewed.
- Substantive expenditure on further exploration for and evaluation of mineral resources in the specific area is neither budgeted nor planned.
- Exploration for & evaluation of mineral resources in the specific area have not led to the discovery of commercially viable quantities of mineral resources and the entity has decided to discontinue such activities in the specific area.
- Sufficient data exist to indicate that, although a development in the specific area is likely to proceed, the carrying amount of the EEA is unlikely to be recovered in full from successful development or by sale.
Any impairment loss is recognised as an expense in accordance with Ind AS 36.
- Disclose information that identifies the amounts recognised in FS arising from the exploration for and evaluation of mineral resources.
- Accounting policies for exploration and evaluation expenditures including the recognition of EEA.
- Amounts of assets, liabilities, income and expense and operating and investing cash flows arising from the exploration for and evaluation of mineral resources.