AASB 6 Differs from Its Predecessor (AASB 1022)in That the Former

question 59

Short Answer

AASB 6 differs from its predecessor (AASB 1022)in that the former restricts its coverage to the first two phases of an extractive operation.Explain the accounting treatment for the other phases of an extractive operation now that these are no longer covered in AASB 6.

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Definitions:

Sell Now

A directive or decision to sell an asset or a product immediately, often to capitalize on current market conditions or to avoid future losses.

Incremental Revenues

Additional income generated from a new project or decision, above and beyond existing revenues.

Incremental Variable Costs

Costs that vary with the level of output or activity, changing as the quantity produced changes.

Fully Depreciated

A status of an asset whose entire cost has been expensed with respect to depreciation, leaving its book value at zero except for salvage value, if any.