Costs for exploration works in extraction of mineral resources in granite quarries: essence, classification and accounting assessment

Abstract

It has been established that the costs of overburden are the costs of open mining operations associated with improving access to the mineral and the ability to separate it from the rock. They include the preparation of rock for extraction by means of blasting, the extraction and loading of rock, their movement and the formation of dumps. The classification of costs for excavation works during the extraction of minerals in granite quarries for accounting purposes has been developed: by economic elements; by the period of recognition as part of expenses; depending on the stage of the life cycle of the technological process of mineral extraction; depending on the subject of performance; according to the degree of completeness of the distribution between reserves and the asset of excavation work; according to the results obtained as a result of their implementation; by capitalization level; based on the results of a comparison of costs for excavation works and the benefits received and the possibility of including costs in the value of assets. An algorithm has been developed for the recognition of costs for overburden work at the mining stage as an asset in accordance with the Interpretation of IFRIC 20 «Expenses for overburden work at the mining stage in a quarry». The content and characteristics of cost items for excavation work in preparatory works for granite extraction in deposits are disclosed in accordance with Appendix No. 1 to the Standard Regulation on planning, accounting and costing of products (works, services in industry) «Nomenclature of cost items for preparatory work in mining industries». It has been established that the main normative documents governing the exploration and estimation of mineral reserves are IFRS 6 «Exploration and estimation of mineral reserves» and National Accounting Regulation (standard) 33 «Expenses for the exploration of mineral reserves». The recognition of costs for excavation works as part of reserves and non-current tangible and intangible assets is characterized, regulated by the Interpretation of IFRIC 20 «Expenses for excavation works at the mining stage in a quarry».

Keywords

• overburden
• classification
• costs
• accounting
• overburden asset
• granite quarry