Hi
Paragraph 3(a) of IFRS 16 Leases states that “an entity shall apply this Standard to all leases, including leases of right-of-use assets in a sublease, except for leases to explore for or use minerals, oil, natural gas and similar non-regenerative resources.
Your point of view required for the following rights to determine whether they would be in scope of the leases standard IFRS 16. Fact Pattern
Right #1 – Right to explore. Entity A obtains a permit from the government that provides it with the right to explore for stone within a tract of Land Y for 20 years. Entity A pays an annual fee to the government for the permit to explore for the stone.
Right #2 – Agreement with private landowner for right to access land. To explore for the stone contained within Land Y, Entity A also obtains the right to access the surface of Land Y from a private owner of the land that contains the resources.
Right #3 – Right to use equipment to explore and extract. To extract the stone from Land Y, Entity A enters into a lease for drilling equipment. The drilling equipment will be used exclusively in the extraction of the stone on Land Y throughout the entire lease term
IFRS 16 for mining industries
Re: IFRS 16 for mining industries
3 seems like it is in scope, but exploration rights are normally an intangible, or whatever you've developed under IFRS 6, mostly likely expense the payments you refer to annually.
Re: IFRS 16 for mining industries
How these 3 are in scop of IFRS 16? IFRS 16 exempt the leases to explore for or use minerals, oil, natural gas and similar non-regenerative resources.
Re: IFRS 16 for mining industries
I would think of it this way: what's in the scope of IFRS 6, falls out of the scope of IFRS 16. Leases of equipment, even if used in extractive activities, isn't in the scope of IFRS 6, hence is accounted for under IFRS 16.
Re: IFRS 16 for mining industries
Hello,
may I kindly ask about subleases of mineral rights?
I expect that they are exempt from IFRS 16 requirements so they should by in the scope of IFRS 15?
The revenuevrecognition is within licensing agreements (intellectual property) or "normal revenue recognition" (at a point in time or over time)?
Thank you very much in advance
Best regards
may I kindly ask about subleases of mineral rights?
I expect that they are exempt from IFRS 16 requirements so they should by in the scope of IFRS 15?
The revenuevrecognition is within licensing agreements (intellectual property) or "normal revenue recognition" (at a point in time or over time)?
Thank you very much in advance
Best regards