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Is the extractive industries standard still fit for purpose?

Journal Article


Abstract


  • The application of AASB 6 by extractive industries firms is examined to determine the issues and challenges faced by financial statement preparers when applying the standard. The results show that while the area-of-interest method is extensively chosen to account for exploration and evaluation costs, there was lack of consistency in its description. Interviews revealed that while preparers reported flexibility in the application of AASB 6, they sought more guidance to reduce reliance on external publications. The findings show that while preparers supported the retention of AASB 6, more guidance on its application was needed, especially in its interaction with new accounting standards and regulations.

Publication Date


  • 2022

Citation


  • Cortese, C., Moerman, L., & Chang, M. (2022). Is the extractive industries standard still fit for purpose?. Accounting and Finance, 62(2), 2807-2838. doi:10.1111/acfi.12893

Scopus Eid


  • 2-s2.0-85120431431

Start Page


  • 2807

End Page


  • 2838

Volume


  • 62

Issue


  • 2

Abstract


  • The application of AASB 6 by extractive industries firms is examined to determine the issues and challenges faced by financial statement preparers when applying the standard. The results show that while the area-of-interest method is extensively chosen to account for exploration and evaluation costs, there was lack of consistency in its description. Interviews revealed that while preparers reported flexibility in the application of AASB 6, they sought more guidance to reduce reliance on external publications. The findings show that while preparers supported the retention of AASB 6, more guidance on its application was needed, especially in its interaction with new accounting standards and regulations.

Publication Date


  • 2022

Citation


  • Cortese, C., Moerman, L., & Chang, M. (2022). Is the extractive industries standard still fit for purpose?. Accounting and Finance, 62(2), 2807-2838. doi:10.1111/acfi.12893

Scopus Eid


  • 2-s2.0-85120431431

Start Page


  • 2807

End Page


  • 2838

Volume


  • 62

Issue


  • 2