Unformatted text preview: ts arising from extractive activities: historical cost, current value, and a mixture of historical cost and current value. The project team recommended historical cost as the preferred measurement basis. Single and separate approach for mining and oil and gas activities The project team proposed to limit the scope of a future IFRS to extractive activities for minerals, oil and natural gas. A single accounting and disclosure model was proposed. The responses highlighted the broad range of views on this subject. Of respondents who addressed this question, 62% agreed with the single model approach. A small minority of respondents didn't believe that a separate accounting standard is required, but supported a disclosure standard that applied a single approach to oil and gas and mining companies. Some respondents who disagreed with a separate single model approach supported including extractive activities in a broader project to reconsider intangible assets accounting. The case for a broader project on intangible assets relates to the question of whether extractive activities are sufficiently different from other industries to justify a separate accounting model. For example, the uncertainty and long project lives inherent in E&E activities are similar to issues in the technology and pharmaceutical industries. Some respondents commented that separate standards should be developed for each of mining and oil and gas.
Asset recognition proposals problematic Most respondents expressed at least some concern with the asset recognition model proposed by the project team. While the majority (63%) agreed with the proposal to recognise an asset when the legal right is acquired, a significant majority of respondents (88%) disagreed with the project team's view that the subsequent E&E activity would always represent an enhancement of the asset.
Many of those respondents suggested that the project team's analysis of the treatment of E&E assets was inconsistent with the asset recognition criteria and the IFRS concept...
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