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Part 5 - Problems

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Layla Main
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31 views

Part 5 - Problems

Uploaded by

Layla Main
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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PROBLEMS (Part 5)

Problem 34-5 Multiple choice (IFRS)

1. Exploration and evaluation expenditures are incurred

a. When searching for an area that may warrant detailed exploration even though the

entity has not yet obtained the legal rights to explore a specific area.

b. When the legal right to explore a specific area has been obtained but the technical

feasibility and commercial viability of extracting a mineral resource are not yet

demonstrable.

c. When a specific area is being developed and preparations for commercial extraction

are being made.

d. In extracting mineral resource and processing the resource to make it marketable or

transportable.
2. When is an entity required to recognize exploration and evaluation expenditure

as an asset?

a. When such expenditure is recoverable in future periods.

b. When the technical feasibility and commercial viability of extracting the associated mineral

resource have been demonstrated.

c. when required by the entity's accounting policy for recognizing exploration and evaluation

asset.

d. Such expenditure is always expensed as incurred.

3. Which of the following expenditures would never qualify as an exploration and

evaluation asset?

a. Expenditure for acquisition of right to explore

b. Expenditure for exploratory drilling

c. Expenditures related to the development of mineral resource.

d. Expenditures for activities in relation to evaluating the technical feasibility and commercial

viability of extracting a mineral resource.


4. Which measurement model applies to exploration and evaluation asset

subsequent to initial recognition?

a. Cost model

b. Revaluation model

c. Cost model and revaluation model

d. Recoverable amount model

5. Which type of expenditure is included in exploration and evaluation of mineral

resources?

a. The extraction and processing of mineral resource for transport to market.

b. The commercial review of possible areas for mineral extraction before bidding for the legal

right to explore a specific area.

c. The expenditure incurred after the technical feasibility and commercial viability of extracting

a mineral resource are demonstrable.

d. None of these should be included in exploration and evaluation expenditures.

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