Australia

Details

  • Service: Audit, Accounting Advisory Services, International Financial Reporting Standards (IFRS)
  • Industry: Energy & Natural Resources, Mining
  • Type: Regulatory update
  • Date: 3/09/2010

New on the Horizon

These publications consider the requirements of IASB Exposure Drafts and discuss key elements of the proposed requirements and observations.

New on the Horizon: Production stripping costs 

Stripping activity can be a significant part of the cost base for many open pit mines. Allocating the cost of this activity between development and cost of sales has long been a matter of debate.  The IFRS Interpretations Committee has now decided to address the issue.
Production stripping costs cover
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The proposed approach of identifying the costs of a stripping campaign against specific proportions of the ore body and charging the cost to the production of the ore in those areas differs significantly from the currently popular average strip ratio approach.

 

Application will require significant judgement in practice, which may limit the degree of a consistency achieved by the proposals, although this may not be much different from the treatment of certain underground development costs.

 

This publication will assist understanding of the proposals in DI/2010/1.

 

Comments to the IFRS Interpretations Committee are due by 30 November 2010.

 

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