Claude Resources Inc. is a Saskatchewan-based "junior" natural resource company involved in gold mining. Note 2 accompanying its 2009 financial statements outlines its significant accounting policies. The portion of this note related to mineral properties is reproduced in Exhibit 8-15.
Required:
a. Describe how Claude Resources determines the carrying value of its mining properties. What kinds of items are capitalized?
b. Is the method that Claude Resources uses to account for exploration and development costs the method that you would expect a mining company to use? Explain.
c. Describe how Claude Resources records interest on debt that is used for the acquisition and development of mining properties. At what point are the interest costs expensed?
d. Describe in your own words how Claude Resources determines whether its mining properties are impaired.