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IPSASB Issues Two Pronouncements on Mineral Resources
06-Feb-2025
IPSASB Issues Two Pronouncements on Mineral Resources
IPSAS 50, Exploration for and Evaluation of Mineral Resources, and Stripping Costs in the Production Phase of a Surface Mine (Amendments to IPSAS 12), have an effective date of January 1, 2027. Earlier application is permitted.
NEW YORK - The International Public Sector Accounting Standards Board (IPSASB®) issued International Public Sector Accounting Standard (IPSAS®) 50, Exploration for and Evaluation of Mineral Resources, and Stripping Costs in the Production Phase of a Surface Mine (Amendments to IPSAS 12).
Minerals can account for a significant proportion of the economic resources in many jurisdictions, and the activities to explore for and extract these minerals require significant investment by mining entities. Up to now, public sector mining entities, reporting under IPSAS Standards, had lacked guidance to produce sufficient information on their investments to pursue the economic benefits of these mineral resources.
“The IPSASB has responded to its stakeholders’ needs by addressing some of the gaps in its literature on mineral resources,” said IPSASB Chair Ian Carruthers. “Together, the new IPSAS 50 and the Amendments to IPSAS 12 will help public sector entities to provide useful financial information and improved accountability in this important area.”
IPSAS 50 provides guidance on accounting for the costs incurred in the exploration and evaluation of mineral resources, based on the selection of an accounting policy specifying which expenditure should be recognized as exploration and evaluation assets. IPSAS 50 is aligned with the private sector requirements in IFRS 6, Exploration for and Evaluation of Mineral Resources, with limited changes for the public sector context.
Stripping Costs in the Production Phase of a Surface Mine (Amendments to IPSAS 12) adds an authoritative appendix to IPSAS 12, Inventories. The guidance clarifies when to capitalize costs incurred to remove waste material in surface mining operations as inventory or a non-current asset or both. The pronouncement is aligned with the guidance in IFRIC 20, Stripping costs in the Production Phase of a Surface Mine, with limited changes for the public sector context.
The effective date for both IPSAS 50 and Stripping Costs in the Production Phase of a Surface Mine (Amendments to IPSAS 12) is January 1, 2027, with earlier application permitted.
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