Preliminary interpretation of IFRIC 20 stripping costs in the production phase of a surface mine

IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine(IFRIC 20) is effective for annual periods beginning on or after 1 January 2013,which is applied for stripping costs in the production phase of an IFRS adopter having surface mines. According to IFRIC 20,the stripping costs of the identified component of the ore body should be recognized as a stripping activity asset if all of three criteria are met. IFRIC 20 specifies the recognition,initial measurement,subsequent measurement,effective date and transition of the stripping activity asset. The article is intended to preliminarily interpret the requirements of IFRIC 20 and analyze its impacts on the entity having surface mines. Although IFRIC 20 has not yet been adopted by the China Accounting Standards,the understanding of requirements and impacts of IFRIC 20 in due course is helpful for Chinese accounting entities having surface mines.