Question 1

Unsuccessful E&E expenditures may be capitalized.

Accepted Answer

A)  Always, as prescribed in IFRS 6. 
B)  When all successful expenditures are also capitalized. 
C)  When efforts to avoid similar unsuccessful efforts are disclosed in detail. 
D)  None of the above 
A)  Always, as prescribed in IFRS 6. 
B)  When all successful expenditures are also capitalized. 
C)  When efforts to avoid similar unsuccessful efforts are disclosed in detail. 
D)  None of the above D

Question 2

Capitalized E&E assets are initially measured at

Accepted Answer

A)  Historical cost 
B)  Fair value less costs to sell 
C)  Fair value 
D)  Replacement cost 
A)  Historical cost 
B)  Fair value less costs to sell 
C)  Fair value 
D)  Replacement cost A

Question 3

An entity should develop a policy for expensing or capitalizing their assets, and be consistent to that policy. There is no set requirement given by IFRS 6.

Accepted Answer

A) True 
 B)False  True

Question 4

Entities must choose between capitalizing all E&E expenditures or no E&E expenditures.

Accepted Answer

A) True 
 B)False

Question 5

When testing for impairment, several cash-generating units may be combined if

Accepted Answer

A)  The combination is not larger than an operating segment. 
B)  The units were not previously impaired. 
C)  The units' exploration efforts have not discovered commercially viable possibilities. 
D)  There are clear indicators that the carrying amounts of the E&E assets are unlikely to be recovered. 
A)  The combination is not larger than an operating segment. 
B)  The units were not previously impaired. 
C)  The units' exploration efforts have not discovered commercially viable possibilities. 
D)  There are clear indicators that the carrying amounts of the E&E assets are unlikely to be recovered.

Question 6

Which of the following would generally be considered a tangible E&E asset?

Accepted Answer

A)  Drilling rights 
B)  Mining claims 
C)  Exploratory oil wells 
D)  None of the above 
A)  Drilling rights 
B)  Mining claims 
C)  Exploratory oil wells 
D)  None of the above

Question 7

Give at least two examples of situations or circumstances that would indicate that an entity must test for impairment.

Accepted Answer

The answer of Give at least two examples of situations...

Question 8

IFRS 6 prescribes the financial reporting for expenditures incurred in

Accepted Answer

A)  Pre-exploration activities 
B)  Exploration activities 
C)  Development activities 
D)  Evaluation activities 
E)  Extraction activities
F) A,B,C,D
G) A,B,D
H) B,C,D,E
I) B,D,E
J) B,E
K) B,D
L) C,E
M) D,E
N) All of the above 
A)  Pre-exploration activities 
B)  Exploration activities 
C)  Development activities 
D)  Evaluation activities 
E)  Extraction activities
F) A,B,C,D
G) A,B,D
H) B,C,D,E
I) B,D,E
J) B,E
K) B,D
L) C,E
M) D,E
N) All of the above

Question 9

An entity must classify all E&E assets as separate classes of assets.

Accepted Answer

A) True 
 B)False

Question 10

At what point is an asset no longer considered to be an E&E asset?

Accepted Answer

The answer of At what point is an asset no...

Question 11

Intangible E&E assets are commonly revalued under the revaluation model.

Accepted Answer

A) True 
 B)False

Question 12

Identify the primary concern of entities operating in the extractives sector. Using the Conceptual Framework, explain why this concern is most important.

Accepted Answer

The answer of Identify the primary concern of entities operating...

Question 13

Which of the following would be considered an intangible asset?

Accepted Answer

A)  A drilling rig used to create exploratory wells 
B)  Depreciation expense on a drilling rig used to create exploratory wells 
C)  A tank used to carry heavy drilling equipment 
D)  None of the above 
A)  A drilling rig used to create exploratory wells 
B)  Depreciation expense on a drilling rig used to create exploratory wells 
C)  A tank used to carry heavy drilling equipment 
D)  None of the above

Question 14

An entity can and should create one standard policy for classifying all exploration and evaluation assets as either tangible or intangible assets.

Accepted Answer

A) True 
 B)False

Question 15

Impairment is measured in accordance exclusively with standards laid out in IFRS 6.

Accepted Answer

A) True 
 B)False

Exam 40: Exploration for and Evaluation of Mineral Resources

Unsuccessful E&E expenditures may be capitalized.

Capitalized E&E assets are initially measured at

An entity should develop a policy for expensing or capitalizing their assets, and be consistent to that policy. There is no set requirement given by IFRS 6.

Entities must choose between capitalizing all E&E expenditures or no E&E expenditures.

When testing for impairment, several cash-generating units may be combined if

Which of the following would generally be considered a tangible E&E asset?

Give at least two examples of situations or circumstances that would indicate that an entity must test for impairment.

IFRS 6 prescribes the financial reporting for expenditures incurred in

An entity must classify all E&E assets as separate classes of assets.

At what point is an asset no longer considered to be an E&E asset?

Intangible E&E assets are commonly revalued under the revaluation model.

Identify the primary concern of entities operating in the extractives sector. Using the Conceptual Framework, explain why this concern is most important.

Which of the following would be considered an intangible asset?

An entity can and should create one standard policy for classifying all exploration and evaluation assets as either tangible or intangible assets.

Impairment is measured in accordance exclusively with standards laid out in IFRS 6.

Introduction to International Financial Reporting Standards Ifrs

Conceptual Framework for Financial Reporting

Fair Value Measurement

Presentation of Financial Statements

Statement of Cash Flows

Accounting Policies, Estimates, and Errors

Events After the Reporting Period

Related Party Disclosures

Earnings Per Share

Operating Segments

Inventories

Financial Instrumentsrecognition and Measurement

Financial Instrumentspresentation

Financial Instrumentsdisclosures

Property, Plant, and Equipment

Intangible Assets

Investment Property

Impairment of Assets

Leases

Revenue From Contracts With Customers

Income Taxes

Employee Benefits

Share-Based Payments

Provisions, Contingent Liabilities, and Contingent Assets

The Effects of Changes in Foreign Exchange Rates

Hyperinflation

Business Combinations

Consolidated Financial Statements

Investments in Associates and Joint Ventures

Joint Arrangements

Disclosure of Interests in Other Entities

Separate Financial Statements

Interim Financial Reporting

Non-Current Assets Held for Sale and Discontinued Operations

Regulatory Deferral Accounts

Borrowing Costs

Accounting and Reporting by Retirement Benefit Plans

Accounting for Government Grants and Disclosure of Government Assistance

Insurance Contracts

Agriculture

First-Time Adoption of International Financial Reporting Standard

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