The accountant for a mining exploration company presents the following figures to the directors of the company as being possible values that could be assigned to its total non-current assets (comprising exploration and evaluation costs and purchases of plant and machinery to date)- $750 000,$1 600 000,or $2 350 000.Use of the figure $2 350 000 indicates that the company is probably using which of the following methods of accounting for exploration and evaluation costs?

Question

Quizplus · Accepted Answer

The full-cost method of accounting for exploration and evaluation costs involves capitalizing all costs related to exploration and evaluation, including both successful and unsuccessful projects. This means that the company would include all costs incurred in calculating its non-current assets, leading to a higher value such as the $2 350 000 presented by the accountant.

The Accountant for a Mining Exploration Company Presents the Following