Which statement describes the "full cost" method?
A)A method of accounting that capitalizes costs of mineral exploration and evaluation only if the outcome is successful.
B)A method of accounting that capitalizes costs of mineral exploration and evaluation only if the production is technically feasible.
C)A method of accounting that capitalizes costs of mineral exploration and evaluation costs without regard to outcome.
D)A method of accounting that capitalizes costs of mineral exploration and evaluation only if the production is commercially viable.

Question

Quizplus · Accepted Answer

The full cost method involves capitalizing all costs associated with exploration and evaluation of mineral resources, regardless of whether or not the outcome is successful, technically feasible, or commercially viable. This method is used by companies in the extractive industries, like mining and oil and gas, to account for the full cost of finding and developing resources.

Which Statement Describes the "Full Cost" Method