The Successful-Effort Method of Accounting for Pre-Production Costs Does Not

question 49

Multiple Choice

The successful-effort method of accounting for pre-production costs does not:

• A) permit the carrying forward of any exploration and evaluation costs.
• B) match the total costs of exploration and evaluation against the revenue arising from the few successful projects.
• C) prohibit the creation of reserves to smooth income by delaying the recognition of expenses and matching them against unrelated revenues.
• D) involve the immediate write-off of any exploration and evaluation costs.