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.