EFRAG has completed its due process regarding IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine and has submitted its Endorsement Advice Letter and Effects Study Report to the European Commission.

Entities engaged in surface mining often need to remove mine waste material (‘overburden’) to gain access to mineral ore deposits. The removal of such waste material results in a combination of ore and waste (which may contain some usable material) or it could instead allow the access to additional ore body.

IFRIC 20 provides guidance on recognition of production stripping costs as an asset and the initial and subsequent measurement of the stripping activity asset.

EFRAG has issued its Endorsement Advice Letter and Effects Study Report relating to the endorsement of IFRIC 20 for use in the European Union and European Economic Area. EFRAG supports IFRIC 20 and has concluded that it meets the technical requirements of endorsement. EFRAG has also concluded that the benefits of reducing the diversity of accounting in practice are likely to outweigh the one-off costs of implementation and the ongoing costs of complying with IFRIC 20.