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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.

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