The project will examine issues associated with accounting for upstream activities. Specifically, this will include the treatment of:

• reserves/resources, which will include determining whether:
  • reserves/resources can or should be recognised as assets on the balance sheet;
  • predevelopment costs incurred following the discovery of reserves/resources should be capitalised or expensed if reserves/resources are not recognised;
  • predevelopment costs incurred prior to the discovery of reserves/resources should be capitalised or expensed; and
  • reserves/resources information should be disclosed, and if so, what information.
• other issues identified in the 2000 Issues Paper and implementation issues arising from the application of IFRSs by entities conducting extractive activities.

Comment was made that the project should not be an overall extractive industries project but should be restricted to those issues that are unique to extractive activities.

There was general support for the approach outlined and for the formation of an advisory committee.