IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine

Synopsis

Entities engaged in surface mining operations often need to ‘strip’ mine waste materials in order to gain access to mineral ore deposits. Two benefits are associated with such ‘stripping’:

1. Usable ore which produces inventory, and
2. Improved access to ore which will be mined in the future IFRIC 20 requires that:

• Costs of stripping which provide benefit in the form of inventory are accounted for under IAS 2C
• Costs of stripping which provide benefit in the form of improved access to ore are recognised as a non-current asset when certain criteria are met. Such an asset is initially measured at cost and subsequently carried at cost or revalued amount less depreciation / amortisation and impairment losses. 

• Read the unaccompanied version of IFRIC 20

The International Accounting Standards Board (IASB) provides free access to the consolidated unaccompanied international accounting standards for the current year through its website. Free registration is required.

Which version of the interpretation?

Financial Reporting Faculty members who joined the faculty prior to 1 November 2022 have premium access to the consolidated edition of IFRS and amendments through the IASB's IFRS Standards Navigator service. Please log into IFRS Standards Navigator to access electronic versions of the standards through these links.

Please be aware that as part of the changes to ICAEW faculty membership, this service will be withdrawn after 31 December 2022.

Recent amendments

Full access to details of all the amendments is only available to Financial Reporting Faculty members. Find out how to join the faculty.

IFRSs referred to by IFRIC 20

• IAS 1 Presentation of Financial Statements 
• IAS 2 Inventories
• IAS 16 Property, Plant and Equipment
• IAS 38 Intangible Assets  

This page was last updated 4 February 2022.