AASB 123 - Borrowing Costs - July 2004
B.2 Extractive industriesB.2 Extractive industries
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B.2 Extractive industries
AASB 1036.1.2 stipulates that the requirements of AASB 1036 override the requirements of AASB 1022 Accounting for the Extractive Industries, in relation to the treatment of borrowing costs. In addition, AASB 1036.11.1.13 comments that, where exploration and evaluation costs are carried forward under AASB 1022 on the basis that activities have not reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, such costs are not qualifying assets because the probability recognition criterion is not met in respect of these costs. Therefore, any related borrowing costs are recognised as an expense in the period incurred. AASB 123 does not address these issues as it is expected these will be addressed by the IASB as part of its project on the extractive industries.