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Is the extractive industries standard still fit for purpose?

Author

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  • Corinne Cortese
  • Lee Moerman
  • Millicent Chang

Abstract

The application of AASB 6 by extractive industries firms is examined to determine the issues and challenges faced by financial statement preparers when applying the standard. The results show that while the area‐of‐interest method is extensively chosen to account for exploration and evaluation costs, there was lack of consistency in its description. Interviews revealed that while preparers reported flexibility in the application of AASB 6, they sought more guidance to reduce reliance on external publications. The findings show that while preparers supported the retention of AASB 6, more guidance on its application was needed, especially in its interaction with new accounting standards and regulations.

Suggested Citation

  • Corinne Cortese & Lee Moerman & Millicent Chang, 2022. "Is the extractive industries standard still fit for purpose?," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 62(2), pages 2807-2838, June.
    • Handle: RePEc:bla:acctfi:v:62:y:2022:i:2:p:2807-2838
    DOI: 10.1111/acfi.12893
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    References listed on IDEAS

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    9. Kevin T. Berry & Charlotte J. Wright, 2001. "The Value Relevance of Oil and Gas Disclosures: An Assessment of the Market's Perception of Firms' Effort and Ability to Discover Reserves," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 28(5‐6), pages 741-769, June.
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    1. Farshadfar, Shadi & Samarbakhsh, Laleh & Jiang, Yige, 2023. "Financial statement comparability and the usefulness of earnings: Some Canadian evidence," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 52(C).

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