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Description :
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The extractive activities project aims to develop an acceptable accounting approach to resolve the issues that are unique to upstream extractive activities. The ultimate objective of the project is to develop an International Financial Reporting Standard (IFRS) to supersede IFRS 6 Exploration for and Evaluation of Mineral Resources.
The IASC initiated the drive for an accounting standard aimed at resolving accounting issues endemic to extractive activities in 1998, which lead to the publication of Issues Paper Extractive Industries in November 2000. In 2001, the IASB announced that the project would be resumed when sufficient agenda time was available.
As an interim measure, the IASB issued IFRS 6 Exploration for and Evaluation of Mineral Resources in 2004. The implication for entities under IFRS 6 was that they could continue to account for mineral resources as they previously had if they developed accounting policies to support it. The standard did not resolve the differences in accounting approaches applied by participants in these activities. At this stage the project was resumed.
This project aims to address, amongst other things, the following items:
1 The definition of reserve and resources and other concepts that are specific to the extractive industry
2 Which items relating to upstream activities meet the definition of an asset
3 Which items relating to upstream activities meet the recognition criteria
4 Which measurement basis should be applied upon initial and subsequent recognition of assets that meet the definition and recognition criteria
5 The treatment of pre-production cost (capitalise or expense)
6 The relevant disclosure requirements that would provide the most decision useful information to users
Although this project does not form part of the MoU it is defined as a modified joint project. The FASB will issue an invitation to comment on the IASB’s Discussion Paper once it is in issue and would consider the responses in deciding whether to add the project to their agenda.
In 2011, the IASB plans to make a decision on whether the extractive activities project should be added to its active agenda. If the IASB decides to add the project to its agenda, the project’s objective would be to develop an IFRS on accounting for extractive activities that would supersede IFRS 6 Exploration for and Evaluation of Mineral Resources.
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Working groups :
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EFRAG Technical Expert Group (EFRAG TEG) -
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Current Project Status :
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Final Comment Letter
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Efrag Output
Comment Letters
No 'Comment Letters'
Other Input
No 'Other Input'
News Items
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