Specifics of cost accounting for searching and exploration minerals

Searching and exploration activity is costly and involves risk-taking, thus the issues of cost accounting of gas and oil-producing companies incurred at the preliminary stage are sufficiently important. Aware that the activities of mining organizations often extend beyond the borders of a particular country and take on an international dimension, it is appropriate to consider these issues within international and domestic standards. This article studies the pre-mining costs accounting methods prior to commercial mining, reports the outlines of the successful efforts’ accounting method and the full costs accounting method as well as determinates the results of their practical application. Special attention is paid to the Regulation on Accounting 24/2011 «Cost accounting for natural resources development», which enables organizations to choose their own cost accounting method freely as to include these costs into searching costs recordings revealing this information in the balance sheet or placing them as part of running ones...