Summary of IFRS 6

Definitions

Exploration for and evaluation of mineral resources means the search for mineral resources, including
minerals, oil, natural gas and similar non-regenerative resources after the entity has obtained legal
rights to explore in a specific area, as well as the determination of the technical feasibility and
commercial viability of extracting the mineral resource. [IFRS 6.Appendix A]

Exploration and evaluation expenditures are expenditures incurred in connection with the exploration
and evaluation of mineral resources before the technical feasibility and commercial viability of
extracting a mineral resource is demonstrable. [IFRS 6.Appendix A]

Accounting policies for exploration and evaluation

IFRS 6 permits an entity to develop an accounting policy for recognition of exploration and evaluation
expenditures as assets without specifically considering the requirements of paragraphs 11 and 12 of IAS
8 Accounting Policies, Changes in Accounting Estimates and Errors. [IFRS 6.9] Thus, an entity adopting
IFRS 6 may continue to use the accounting policies applied immediately before adopting the IFRS. This
includes continuing to use recognition and measurement practices that are part of those accounting
policies.

Impairment

IFRS 6 effectively modifies the application of IAS 36 Impairment of Assets to exploration and evaluation
assets recognised by an entity under its accounting policy. Specifically:

Entities recognising exploration and evaluation assets are required to perform an impairment test on
those assets when specific facts and circumstances outlined in the standard indicate an impairment test
is required. The facts and circumstances outlined in IFRS 6 are non-exhaustive, and are applied instead
of the 'indicators of impairment' in IAS 36 [IFRS 6.19-20] Entities are permitted to determine an
accounting policy for allocating exploration and evaluation assets to cash-generating units or groups of
CGUs. [IFRS 6.21] This accounting policy may result in a different allocation than might otherwise arise
on applying the requirements of IAS 36 If an impairment test is required, any impairment loss is
measured, presented and disclosed in accordance with IAS 36. [IFRS 6.18]

Presentation and disclosure

An entity treats exploration and evaluation assets as a separate class of assets and make the disclosures
required by either IAS 16 Property, Plant and Equipment or IAS 38 Intangible Assets consistent with how
the assets are classified. [IFRS 6.25]
IFRS 6 requires disclosure of information that identifies and explains the amounts recognised in its
financial statements arising from the exploration for and evaluation of mineral resources, including:
[IFRS 6.23–24]

its accounting policies for exploration and evaluation expenditures including the recognition of
exploration and evaluation assets the amounts of assets, liabilities, income and expense and operating
and investing cash flows arising from the exploration for and evaluation of mineral resources.