PPE-Natural Resources Flashcards
1
Q
What does Natural Resource account include/exclude?
A
- Include: Cost of acquiring, exploring, and developing resource
- Exclude: Cost of extracting resource
2
Q
What can amount capitalized not exceed for Natural Resources?
A
-Expected value of resources to be removed
3
Q
What do development costs pertain to?
A
-Facilities that will not be removed when project is finished
4
Q
What is depletion?
A
- Allocation of natural resource to inventory
- Not an expense
5
Q
How do you calculate the depletion rate?
A
(Natural Resources Cost - Residual Value) / Total Est. Units
