Lowell Corporation acquires a gold mine at a cost of
Lowell Corporation acquires a gold mine at a cost of $400,000. Development costs that were incurred total $100,000, including $12,300 of depreciation on movable equipment to construct mine shafts. Based on construction to date, the legal obligation to restore the property after the mine is exhausted has a present value of $75,000. Lowell has publicly pledged an additional $20,000 (present value) for improved reclamation of the area surrounding the mine. Prepare the journal entries to record the cost of the natural resource if Lowell prepares financial statements in accordance with
(a) IFRS
(b) ASPE.
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