I have'nt had to deal with accounting for development costs in a while but my hazy recollection is that mining companies used to have the option to capitalise any development costs and then expense them at the same time that the actual extraction of the ore which relied on the previously developed area took place. I think that there has been a change to accounting standards which now requires these costs to be expensed as incurred.
This practice led to situations where companies would capitalise costs during a year of low profitability in order to prop up there p and l and expense costs (sometimes at a higher rate) in the good times whihc depressed the p and l. Again I think there has been an accounting standard change to avoid this situation from arising...
In terms of Mundo I am a long term holder and see the future potential in the stock, primarily based upon the go forward plan and the reduction in risk as multiple mines/ore sources come on line.
As recent posters have highlighted the mining game relies upon tonnage, grade and recovery along with a focus on the management of total costs to produce a return for holders.
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I have'nt had to deal with accounting for development costs in a...
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