While going through the definition of AS 6, it said about its applicability except: 1) Forests, Plantation etc 2) Wasting assets like Extraction of Minerals, Oil and Gas etc 3) Expenditure on R&D 4) Livestock. Since, Coal mines come under Wasting asset, hence, this standard should not be applicable to it. But still we use 'Depletion Method' for calculating depreciation of a Coal mine. Why?
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Explanation on AS 6 needed for Coal Mine
Replies (1)
Depletion method is the same as units of production depreciation method just like I guessed.
The PPE standards are not applicable for mining. They will follow their own cost methodologies,
Any doubts?
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