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

IFRIC 20 addresses the accounting treatment of mine waste materials, which are the materials removed by mining entities in order to gain access to mineral ore deposits.

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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.
  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.

Recent amendments

All amendments issued up to and including the publication date of 1 January 2022 are included within the IFRS Foundation’s latest version of the issued interpretation: 2022 Issued Standards – IFRIC 20. Issued amendments may, therefore, have a mandatory effective date that is later than 1 January 2022 – see below for details.

Any amendments issued after 1 January 2022 will not be included in the IFRS Foundation’s 2022 Issued Standards but will be listed below and identified as such.

See the Corporate Reporting Faculty’s annual IFRS factsheets for a more detailed discussion of recent IFRS amendments.

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