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• Before the exploration for and evaluation of mineral resources; and
 

• After the technical feasibility and commercial viability of extracting a mineral resource are demonstrable.

• For each area of interest of an Australian entity, expenditures incurred in the exploration for and evaluation of mineral resources must be expensed as incurred or partially or fully capitalised as an exploration and evaluation asset
• An exploration and evaluation asset must only be recognised in relation to an area of interest if the following conditions are met:
• The rights to tenure of the area of interest are current./li>
• At least one of the following conditions is also met:
• The exploration and evaluation expenditures are expected to be recouped through successful development or by it sale
• Exploration and evaluation activities are not yet at a stage which allows a reasonable assessment of the existence of reserves at reporting date
• An area of interest is an individual geological area whereby the presence of a mineral deposit or an oil or natural gas field is considered favourable or has been proved to exist

• Exploration and evaluation assets must be recognised at cost at recognition
• Examples of expenditures that can be included in the initial measurement of exploration and evaluation assets include:
• Acquisition of rights to explore
• Geological studies
• Drilling, trenching and sampling
• Indirect costs such as depreciation of equipment used in exploration activities
• Expenditures related to the development of mineral resources are not exploration and evaluation assets, but should be accounted for based on the guidance in AASB 138 Intangible Assets
• Any obligations for restoration as a consequence of the exploration must be recognised in accordance with AASB 137 Provisions, Contingent Liabilities and Contingent Assets
• After recognition, an entity can apply either the cost model or revaluation model (as per AASB 116 Property, Plant and Equipment or AASB 138) to its exploration and evaluation assets

• Exploration and evaluation assets are classified as tangible or intangible according to the nature of the assets acquired
• To the extent that a tangible asset (e.g. drilling rigs) is consumed in developing an intangible asset, the amount reflecting that consumption is part of the cost of the intangible asset

• Impairment testing must be performed on exploration and evaluation assets when the facts and circumstances suggest that the carrying amount of an asset may exceed its recoverable amount including:
• Rights of tenure have expired or will expire in the near future and are not expected to be renewed
• Substantive expenditure on further exploration and evaluation in the specific area is neither budgeted or planned
• The entity has decided to discontinue exploration and evaluation activities in the specific area
• Data to hand indicates that the carrying amount of the exploration and evaluation asset is unlikely to be recovered from successful development or from sale
• Impairment is measured and recognised in accordance with AASB 136 Impairment of Assets
• Allows impairment to be assessed at a higher level higher than the “cash generating unit” under AASB 136 being the lesser of:
• An area of interest; or
• Segment based on AASB 114 Segment Reporting or AASB 8 Operating Segments (applicable from 1 January 2009, with early adoption permitted).

• Accounting policy for exploration and evaluation expenditures, including recognition of exploration and evaluation expenditures
• Amounts of assets, liabilities, income and expense and operating and investing cash flows arising from the exploration for and evaluation of mineral resources