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.