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Accounting for Pre‐production Costs: Extracting Consensus
Author(s) -
GERHARDY PETER G.
Publication year - 1999
Publication title -
australian accounting review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.551
H-Index - 36
eISSN - 1835-2561
pISSN - 1035-6908
DOI - 10.1111/j.1835-2561.1999.tb00109.x
Subject(s) - accounting , production (economics) , diversity (politics) , business , accounting method , work (physics) , economics , political science , engineering , law , macroeconomics , mechanical engineering
Accounting for the extractive industries has recently been added to the work program of the LASC, suggesting that Australian standard‐setters will soon reconsider the relevant Australian standards. The method to be used to account for pre‐production costs is likely to be a major concern in these deliberations. This paper discusses the available alternative accounting methods, including the change in regulation that SAC 4 would suggest is required. The paper reviews the development of the existing standard and presents evidence of significant diversity in mining companies' accounting practices. With this background in mind, the future of accounting regulation in the area is considered.