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ACCOUNTING STANDARDS

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Explain the manner in which AASB 6, with respect to exploration and evaluation expenditures, elaborates on the definition and recognition criteria for assets specified in theAASB Framework for the Preparation and Presentation financial Statements (the Framework).To what extent are the AASB 6 rules for exploration and evaluation expenditures consistent with the asset definition and recognition criteria specified in the Framework? Are there any inconsistencies and, if so, why do you think these arise?AASB 6 and the Framework are available for download from the website of the Australian Accountin...

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Question Preview:

Explain the manner in which AASB 6, with respect to exploration and evaluation expenditures, elaborates on the definition and recognition criteria for assets specified in theAASB Framework for the Preparation and Presentation financial Statements (the Framework).To what extent are the AASB 6 rules for exploration and evaluation expenditures consistent with the asset definition and recognition criteria specified in the Framework? Are there any inconsistencies and, if so, why do you think these arise?AASB 6 and the Framework are available for download from the website of the Australian Accounting StandardsBoard:
AASB 6:http://www.aasb.gov.au/Pronouncements/Current-financial-year-standards.aspx Framework:http://www.aasb.gov.au/pronouncements/conceptual-framework.aspx

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AASB 6:

AASB 6 is connected with the exploration and evaluation of the mineral resources. Any company shall determine the policy of accounting in relation to the expenses that have been incurred for the purposes of exploring and evaluating the assets and then the accounting policies shall be applied consistently. For the purposes of determining the degree to which the expense is connected with any specific mineral will have to be determined separately. An example of the same is connected with the rights of exploration of the assets and the study of the geography etc.

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