The Outback Mining Company Ltd has incurred various costs to explore an area of interest and wants to capitalise its Exploration and Evaluation (E&E) expenditures on an area of interest basis. The following costs have been incurred.

Required:

Explain how each of these costs should be treated under AASB 6?

1. the acquisition of speculative seismic data in relation to the area of interest to help determine whether to apply for an exploration licence, costing $2,800
2. labour costs of engineers analysing the seismic data, costing $3,400
3. the exploration licence fee costing $850

PART B

State how each of the following items should be valued and explain why:

1. olives on olive trees
2. chickens kept on a farm
3. cooked turkeys at a supermarket
4. trees in a forest