accounting

Case study The World Blue Diamond Mineral Company Led (TWBDMCL) acquired a mining property in North Australia by paying $ 5 000 000 . State council informed them that mine cite must be restored to the original level at the end of the project. The accountant of TWBDMCL faces many issues in accounting for pre-production cost of mining project in accordance with AASB 6. In accumulating the pre-production costs accountant encounters the following major issues; 1. Whether all production costs incurred in relation to the "initial area of interest" should be accumulated against that area without regard for the contraction of its size, 2. Whether such costs should be apportioned between those parts of the area that continue to be the subject of activities, and those parts that have been abandoned. The AASB has issued AASB 6, which is equivalent to International Financial Reporting Standards 6 replacing AASB 1022 for which accountant is more familiar with. Required: 1. Evaluate the five phases of a company's operations in the extractive industries. 2. How do the requirements of AASB 6 differ from the requirements of its predecessor, AASB 1022? 3. Consider the above case and evaluate the alternative methods