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NATURAL RESOURCES AND DEPLETION

NATURAL RESOURCES
Exploration Costs

Full Cost Approach Successful Efforts Approach


• Both successful and • Successful exploration
unsuccessful exploration costs are capitalized.
costs are capitalized.
• Depletion is recognized
• Depletion is recognized using the units-of-activity
using the units-of-activity method.
method.
• Unsuccessful exploration
costs are expensed.

DEPLETION

Note: Both the full cost and successful efforts approaches


are used in accounting for natural resources.

Copyright 1999 John Wiley & Sons, Inc. Weygandt/Principles 5e T T 10 –M