A company incurs significant costs in relation to a speculative mining project that intends to turn rocks into gold.In accordance with the AASB's Conceptual Framework,the costs of this project would be an:
A)expense because there is little probability that future economic benefits will eventuate.
B)expense because the recognition criteria for an asset is not satisfied.
C)asset because the definition and recognition criteria for assets are satisfied.
D)asset because the company will control the future economic benefits.

Question

Quizplus · Accepted Answer

The costs are considered an expense because there is little probability that future economic benefits will eventuate, which does not satisfy the recognition criteria for an asset according to the AASB's Conceptual Framework.

A Company Incurs Significant Costs in Relation to a Speculative