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Topic: Business
Number of pages / Number of words: 3 / 821
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This allows expenditures to be capitalised as an asset even before the existence of economically recoverable reserves. Although this method is against the framework, through amortisation the costs carried forward will be matched against the revenues of the period that benefit from those costs.

Area of interest method-

This allows an organisation to carry forward preproduction costs on the basis that ‘activities in the area of interest have not at the time of preparing financial statements, reached a stage which permits a reasonable assessment of the existence or otherwise recoverable reserves’...


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Although this method is against the framework, through amortisation the costs carried forward will be matched against the revenues of the period that benefit from those costs.

Area of interest method-

This allows an organisation to carry forward preproduction costs on the basis that ‘activities in the area of interest have not at the time of preparing financial statements, reached a stage which permits a reasonable assessment of the existence or otherwise recoverable reserves’...


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