Question
Gold Mining Bhd which is involved in mineral mining has appointed Encik Shafiq as a new accountant for the company. Currently, the company is using
Gold Mining Bhd which is involved in mineral mining has appointed Encik Shafiq as a
new accountant for the company. Currently, the company is using the expense
method to recognise its exploration costs. The board of directors has argued that this
method seems unrealistic. One of the board of directors has suggested the
successful effort method of accounting be considered for the recognition of the
exploration costs.
Required:
Advise the board of directors on the two methods mentioned above. Your arguments
should also include the arguments for and against on each method.
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