Under the successful efforts method of accounting for exploration and evaluation of assets:

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Under the successful efforts method, only the costs related to successful efforts are capitalized as exploration and evaluation assets, while the costs associated with unsuccessful efforts are expensed immediately. This method is used to provide more accurate reporting of a company's resources and profitability by only recognizing assets that are likely to generate future economic benefits.

Under the Successful Efforts Method of Accounting for Exploration and Evaluation