IAS 16 – Accounting for production phase stripping costs in the mining industry

Date recorded:

The Committee discussed three other issues which came to the staff's attention while drafting the near final Interpretation.

Firstly, the Committee tentatively agreed to amend paragraph 17 to acknowledge the cost or revaluation alternatives for subsequent measurement, according to the valuation model used for the entity's mining assets.

Secondly, the Committee tentatively agreed to remove paragraphs 12 and 13 as paragraph 12 appeared to state the obvious and paragraph 13 could be read to imply that the stripping activity asset should be derecognised once the stripping activity is completed - which was not what was intended.

Thirdly, the Committee tentatively agreed to propose to the Board that the effective date for the Interpretation should be 1 January 2013 with earlier application permitted.

The Committee tentatively agreed not to re-expose the near final Interpretation but requested the staff to make some changes to the guidance, including changing the wording to require rather than to suggest that the entity use an allocation basis that is based on a relevant production measure as a basis to allocate the production stripping costs between the inventory produced and the stripping activity asset.

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