Download - Environmental Accounting
![Page 1: Environmental Accounting](https://reader035.vdocument.in/reader035/viewer/2022062314/55cf98fd550346d0339addfc/html5/thumbnails/1.jpg)
EVELYN CERINOJUAN RAFAEL FERNANDEZ
DANNAFAYE SORNILLO
Environmental Accounting
![Page 2: Environmental Accounting](https://reader035.vdocument.in/reader035/viewer/2022062314/55cf98fd550346d0339addfc/html5/thumbnails/2.jpg)
Introduction
The Philippines is gifted with a wide area of dense forests, home to a wide variety of fauna and flora, providing for clean water and fresh air.
The unabated exploitation of earth’s natural resources and the resulting degradation of its environment created a heightened level of awareness and concern for the environment among many nations.
![Page 3: Environmental Accounting](https://reader035.vdocument.in/reader035/viewer/2022062314/55cf98fd550346d0339addfc/html5/thumbnails/3.jpg)
History
Environmental accounting in the Philippines started within the year 1990-1991 with the implementation of the Philippine Environmental and Natural Resources Accounting Project (ENRAP) funded by the U.S. Agency.
![Page 4: Environmental Accounting](https://reader035.vdocument.in/reader035/viewer/2022062314/55cf98fd550346d0339addfc/html5/thumbnails/4.jpg)
Purpose
Aims to include in the traditional measurement of economic development the cost for using the environment as inputs to production and as a sink for wastes.
Estimates the cost of the use of natural resources and its environmental functions and segregates the portion of total expenditures of the various economic sectors spent for protecting and preventing the decline in the quality of the environment.
![Page 5: Environmental Accounting](https://reader035.vdocument.in/reader035/viewer/2022062314/55cf98fd550346d0339addfc/html5/thumbnails/5.jpg)
Definition
Also referred to as “green accounting”, “resource accounting” and “integrated environmental and economic accounting.”
field that identifies resource use, measures and communicates costs of a company’s or national economic impact on the environment.
![Page 6: Environmental Accounting](https://reader035.vdocument.in/reader035/viewer/2022062314/55cf98fd550346d0339addfc/html5/thumbnails/6.jpg)
Benefits and Elements
Environmental conservation cost (monetary value) Related to the prevention, reduction, and/or avoidance
of environmental impact, removal of such impact, restoration following the occurrence of a disaster, and other activities are measured in monetary value.
![Page 7: Environmental Accounting](https://reader035.vdocument.in/reader035/viewer/2022062314/55cf98fd550346d0339addfc/html5/thumbnails/7.jpg)
Benefits and Elements (cont’d)
Environmental conservation benefits (physical units) Benefits obtained from the prevention, reduction,
and/or avoidance of environmental impact, removal of such impact, restoration following the occurrence of a disaster, and other activities are measured in physical units.
Economic benefits of environmental conservation activities (monetary value)
Benefits to a company’s profit as a result of carrying forward with environmental conservation activities are measured in monetary value.
![Page 8: Environmental Accounting](https://reader035.vdocument.in/reader035/viewer/2022062314/55cf98fd550346d0339addfc/html5/thumbnails/8.jpg)
Disciplines
Global environmental accounting National environmental accounting Corporate environmental accounting
Environmental management accounting Environmental financial accounting
![Page 9: Environmental Accounting](https://reader035.vdocument.in/reader035/viewer/2022062314/55cf98fd550346d0339addfc/html5/thumbnails/9.jpg)
Importance
Citizens will better understand environmental risks and the economic condition of the nation.
The state of the environment can be assessedReveal economic distortions in the production
and consumption activities.
![Page 10: Environmental Accounting](https://reader035.vdocument.in/reader035/viewer/2022062314/55cf98fd550346d0339addfc/html5/thumbnails/10.jpg)
Mining Definition
Mining is the discovery, valuation, development, exploitation, processing, and marketing of useful minerals.
![Page 11: Environmental Accounting](https://reader035.vdocument.in/reader035/viewer/2022062314/55cf98fd550346d0339addfc/html5/thumbnails/11.jpg)
Mining Industry Background
Throughout the centuries, people from different corners of the globe mined for different kinds of minerals which they used in their daily lives.
However, it has destroyed the planet's biosphere, including wildlife, affecting farmers, fishermen, indigenous people, and causing the degradation of the last remaining forests, rivers and oceans of the world
![Page 12: Environmental Accounting](https://reader035.vdocument.in/reader035/viewer/2022062314/55cf98fd550346d0339addfc/html5/thumbnails/12.jpg)
History
Started in the pre-colonial period.Indigenous communities mined for gold,
copper and many other mineralsGold was also bartered, through the Arab
world, with merchants all over Asia and Europe in the pre-Islamic and Islamic periods.
The first commercial mine in the Philippines was in Benguet, in Central Luzon, established by the Benguet Mining Corporation.
![Page 13: Environmental Accounting](https://reader035.vdocument.in/reader035/viewer/2022062314/55cf98fd550346d0339addfc/html5/thumbnails/13.jpg)
History (cont’d)
Spanish colonisers took advantage of whatever mineral resources they could get, through, Inspeccion de Minas.
Americans made strategic steps to exploit the minerals of the Philippines, issued Act 468, that gave the government the right to reserve mineral lands for its own purposes
Thus begin, commercialization of the Benguet gold mining.
![Page 14: Environmental Accounting](https://reader035.vdocument.in/reader035/viewer/2022062314/55cf98fd550346d0339addfc/html5/thumbnails/14.jpg)
History (cont’d)
1914, Surigao and other parts of the Caraga region were declared as an "iron reserved" area for future mining.
Commonwealth US government, formed Mining Bureau to regulate all potential operations in the future.
1921, no large-scale gold mining only small-scale
Under Japanese occupation, Filipinos in many regions of the country were coerced into mining for metals to be used for war weapons.
![Page 15: Environmental Accounting](https://reader035.vdocument.in/reader035/viewer/2022062314/55cf98fd550346d0339addfc/html5/thumbnails/15.jpg)
History (cont’d)
This paved the way for further commercialization, exploitation and degeneration of the Philippines.
Up until 1980’s, gold went on decline and world demand for copper decreased in favor of gold.
By 1994, pro-development politicians, such as Gloria Macapagal Arroyo, lobbied for a Mining Bill which would later become the Republic Act 7942 or the Philippine Mining Act of 1995.
![Page 16: Environmental Accounting](https://reader035.vdocument.in/reader035/viewer/2022062314/55cf98fd550346d0339addfc/html5/thumbnails/16.jpg)
History (cont’d)
1996, the Philippine mining industry got back on track, allowing offshore companies to operate fully in the 'reserved areas‘.
March 1996, the Marcopper tunnel in Marinduque collapsed.
1.6 million cubic meters of mine tailings flowed from the mine pit to the Makulapnit and Boac river, trapping 4,400 people in 20 villages.
This caused massive siltation in downstream communities and coastal areas.
![Page 17: Environmental Accounting](https://reader035.vdocument.in/reader035/viewer/2022062314/55cf98fd550346d0339addfc/html5/thumbnails/17.jpg)
History (cont’d)
1998, an explosion occurred in Malangas Coal Corporation, killing almost a hundred workers and injuring 35 people.
2004, Three disastrous incidents occurred, where approximately five million cubic meters of waste materials containing high levels of mercury were released, damaging local people's agricultural lands and temporarily poisoning the adjacent Placer Bay.
![Page 18: Environmental Accounting](https://reader035.vdocument.in/reader035/viewer/2022062314/55cf98fd550346d0339addfc/html5/thumbnails/18.jpg)
Regulatory Boards, Subordinate Bureaus
Department of Environment and Natural resources (DENR) Formulation and Implementation of rules and policies
that involve the management of the environment, and the prevention and control of pollution
Supervision of policies and programs that concerns the conservation, use, and replenishment of the country's natural resource
Establishment of rules concerning the Philippine forests, lands, mineral source, and wildlife
![Page 19: Environmental Accounting](https://reader035.vdocument.in/reader035/viewer/2022062314/55cf98fd550346d0339addfc/html5/thumbnails/19.jpg)
Subordinate Bureaus (DENR)
Ecosystems Research and Development Bureau (ERDB) Formulates and recommends an integrated research program
relating to Philippine ecosystems and natural resources; Assists the Secretary in determining a system of priorities for
the allocation of resources to various technological research programs of DENR;
Provides technical assistance in the implementation and monitoring of research programs;
Coordinates all technological researches undertaken by all the regional research offices; and
Assesses and translates all recommendable findings into understandable language and presentation and disseminates these findings to end users and clientele.
![Page 20: Environmental Accounting](https://reader035.vdocument.in/reader035/viewer/2022062314/55cf98fd550346d0339addfc/html5/thumbnails/20.jpg)
Subordinate Bureaus (DENR)
Forest Management Bureau (FMB)Land Management Bureau LMBProtected Areas and Wildlife BureauEnvironmental Management Bureau (EMB)Mines and Geosciences Bureau (MGB)
![Page 21: Environmental Accounting](https://reader035.vdocument.in/reader035/viewer/2022062314/55cf98fd550346d0339addfc/html5/thumbnails/21.jpg)
Other Offices and Agencies
National Mapping & Resource Information Authority Laguna Lake Management Authority Natural Resources Development Corp. Pasig River Rehabilitation Commissions Land Registration Authority National Commission on Indigenous People National Water Resource Board National Solid Waste Management Commission River Basin Control Office Philippine Forest Corporation Land Administration Management Project Environmental Law Enforcement Task Force
![Page 22: Environmental Accounting](https://reader035.vdocument.in/reader035/viewer/2022062314/55cf98fd550346d0339addfc/html5/thumbnails/22.jpg)
Philex Mining Corporation
Vision - Our vision is to be a highly respected, world-class natural resource company committed to deliver excellent value to its investors, employees, and other stakeholders.
Mission - We are a responsible mining corporation that discovers and processes minerals and energy resources for the use of society.
![Page 23: Environmental Accounting](https://reader035.vdocument.in/reader035/viewer/2022062314/55cf98fd550346d0339addfc/html5/thumbnails/23.jpg)
Organizational Chart
![Page 24: Environmental Accounting](https://reader035.vdocument.in/reader035/viewer/2022062314/55cf98fd550346d0339addfc/html5/thumbnails/24.jpg)
Corporate Structure
![Page 25: Environmental Accounting](https://reader035.vdocument.in/reader035/viewer/2022062314/55cf98fd550346d0339addfc/html5/thumbnails/25.jpg)
Philex Current Events and News
Philex’s SMMCI adopts Surigao river for environmental protection.
Philex to raise TSF3’s tails beach to 608 ML for more stability
Philex considering vetiver for environment, livelihood programs
![Page 26: Environmental Accounting](https://reader035.vdocument.in/reader035/viewer/2022062314/55cf98fd550346d0339addfc/html5/thumbnails/26.jpg)
OTHER NEWS AND CURRENT EVENTS RELATING TO THE INDUSTRY
Leyte coastal rehab to cost P350MAquino urged to stop pushing coal power
plantsMining industry sees role in typhoon-hit
areas' rehabilitation
![Page 27: Environmental Accounting](https://reader035.vdocument.in/reader035/viewer/2022062314/55cf98fd550346d0339addfc/html5/thumbnails/27.jpg)
ENVIRONMENTAL POLICIES AND ISSUES
P.D. 984 - Pollution Control LawP.D. 1151 – Philippine Environmental PolicyP.D. 1586 - defines the framework for the
implementation of the environmental impact assessmen
P.D. 1219 – providing for the protection of coral ecosystems.
P.D. 1067 – Water Code of the PhilippinesP.D. 463 – Amended the Mining Act of 1936P.D. 1198 – Reinforces this provision for
restoration of mined-out areas to this original condition to the extent possible.
![Page 28: Environmental Accounting](https://reader035.vdocument.in/reader035/viewer/2022062314/55cf98fd550346d0339addfc/html5/thumbnails/28.jpg)
ENVIRONMENTAL POLICIES AND ISSUES (cont’d)
P.D. 1251 – Imposes fines on tailings and mine wastes
P.D. 600 ( amended by P.D. 979) – Water Pollution Control
R.A. 9003 – The Solid Waste Management Act of 2001
R.A. 9275- The Philippine Clean Water Act of 2004
![Page 29: Environmental Accounting](https://reader035.vdocument.in/reader035/viewer/2022062314/55cf98fd550346d0339addfc/html5/thumbnails/29.jpg)
PFRS 6 - EXPLORATION AND EVALUATION OF MINERAL RESOURCES
It is the search for mineral resources, including minerals, oil, natural gas and similar non-regenerative resources after the entity has obtained legal rights to explore in a specific area.
Determination of technical feasibility and commercial viability of extracting the mineral resource.
![Page 30: Environmental Accounting](https://reader035.vdocument.in/reader035/viewer/2022062314/55cf98fd550346d0339addfc/html5/thumbnails/30.jpg)
PFRS 6 - EXPLORATION AND EVALUATION OF MINERAL RESOURCES
Exploration and evaluation expenditures include the following: Acquisition of rights to explore Topographical, geological, geochemical and
geophysical studies Exploratory drilling Trenching Sampling
![Page 31: Environmental Accounting](https://reader035.vdocument.in/reader035/viewer/2022062314/55cf98fd550346d0339addfc/html5/thumbnails/31.jpg)
PFRS 6 - EXPLORATION AND EVALUATION OF MINERAL RESOURCES
Expenditures related to development of mineral resources, for example, preparation for commercial production, such as building roads and tunnels, cannot be recognized as exploration and evaluation expenditures.
Exploration and evaluation asset The exploration and evaluation expenditures may
qualify as exploration and evaluation asset. However, the standard does not provide a clearcut guidance for the recognition of exploration and evaluation asset.
![Page 32: Environmental Accounting](https://reader035.vdocument.in/reader035/viewer/2022062314/55cf98fd550346d0339addfc/html5/thumbnails/32.jpg)
Measurement and Classification
Exploration and evaluation asset is measured initially at cost
After initial recognition, an entity shall apply either the cost model or the revaluation model.
Classified either as tangible asset or an intangible asset.
![Page 33: Environmental Accounting](https://reader035.vdocument.in/reader035/viewer/2022062314/55cf98fd550346d0339addfc/html5/thumbnails/33.jpg)
Impairment
When facts and circumstances suggest that the carrying amount may exceed recoverable amount: The period for which the entity has the right to explore in a
specific area has expired and is not expected to be renewed. Substantive expenditure for exploration and evaluation is
neither budgeted nor planned. The exploration and evaluation activities have not led to the
discovery of commercially viable quantity of mineral resource and the entity has decided to discontinue such activities.
Sufficient data indicate that the carrying amount of the exploration and evaluation asset is unlikely to be recovered in full from successful development by sale.
![Page 34: Environmental Accounting](https://reader035.vdocument.in/reader035/viewer/2022062314/55cf98fd550346d0339addfc/html5/thumbnails/34.jpg)
Wasting assets
Are material objects of economic value and utility to man produced by nature.
Natural resources such as coal, oil, ore, and precious metals like gold, silver and timber.
Two main features: The wasting assets are physically consumed. The wasting assets are irreplaceable.
![Page 35: Environmental Accounting](https://reader035.vdocument.in/reader035/viewer/2022062314/55cf98fd550346d0339addfc/html5/thumbnails/35.jpg)
Cost of wasting asset
Divided into four categories: Acquisition cost Exploration cost Development cost Estimated restoration cost
![Page 36: Environmental Accounting](https://reader035.vdocument.in/reader035/viewer/2022062314/55cf98fd550346d0339addfc/html5/thumbnails/36.jpg)
Acquisition cost
Price paid to obtain the property containing natural resource.
This is the initial cost of the wasting asset.If there is a residual land value after the
extraction of the natural resource, the portion of the acquisition cost applicable to the land may be included in the natural resource account or may be set up in a separate account and the remaining cost should be charged to the natural resources account.
![Page 37: Environmental Accounting](https://reader035.vdocument.in/reader035/viewer/2022062314/55cf98fd550346d0339addfc/html5/thumbnails/37.jpg)
Exploration cost
Cost incurred in an attempt to locate the natural resource that can economically be extracted or exploited.
The “successful effort” method, only the exploration cost directly related to the discovery of commercially producible natural resource is capitalized as cost of the resource property. The exploration cost related to “dry wells” or unsuccessful discovery is expensed in the period incurred.
![Page 38: Environmental Accounting](https://reader035.vdocument.in/reader035/viewer/2022062314/55cf98fd550346d0339addfc/html5/thumbnails/38.jpg)
Exploration cost (cont’d)
The “full cost” method, all exploration costs, whether successful or unsuccessful, are capitalized as cost of the successful resource discovery.
![Page 39: Environmental Accounting](https://reader035.vdocument.in/reader035/viewer/2022062314/55cf98fd550346d0339addfc/html5/thumbnails/39.jpg)
Development cost
Cost incurred to exploit or extract the natural resource that has been located through successful exploration.
Can be tangible equipment and intangible development cost.
Tangible equipment cost is not capitalized as cost of natural resource but set up in a separate amount and depreciated in accordance with normal depreciation policies.
![Page 40: Environmental Accounting](https://reader035.vdocument.in/reader035/viewer/2022062314/55cf98fd550346d0339addfc/html5/thumbnails/40.jpg)
Development cost (cont’d)
Intangible development cost is capitalized as cost of the natural resource. Such cost includes drilling, sinking mine shaft and construction of wells.
![Page 41: Environmental Accounting](https://reader035.vdocument.in/reader035/viewer/2022062314/55cf98fd550346d0339addfc/html5/thumbnails/41.jpg)
Restoration cost
Under paragraph 16 of PAS 16, the estimated cost of restoring the property to its original condition is capitalized only when the entity incurs the obligation when the asset is acquired.
![Page 42: Environmental Accounting](https://reader035.vdocument.in/reader035/viewer/2022062314/55cf98fd550346d0339addfc/html5/thumbnails/42.jpg)
Depletion
Systematic allocation of the depletable amount of a wasting asset over the period the natural resource is extracted or produced.
Can be computed using output or production method.
![Page 43: Environmental Accounting](https://reader035.vdocument.in/reader035/viewer/2022062314/55cf98fd550346d0339addfc/html5/thumbnails/43.jpg)
Output Method
The depletable amount of the wasting asset is divided by the units estimated to be extracted to obtain a depletion rate per unit. The depletion rate per unit is then multiplied by the units extracted during the year to arrive at the depletion for the period.
![Page 44: Environmental Accounting](https://reader035.vdocument.in/reader035/viewer/2022062314/55cf98fd550346d0339addfc/html5/thumbnails/44.jpg)
Example
A wasting asset entity has acquired the right to use a property to explore a natural resource. The acquisition cost is P5, 500,000, the related exploration costs amount to P3,500,000, and development costs incurred in erecting wells and drilling the deposit are P6,000,000. Total costs of the wasting asset therefore amount to P15,000,000. It is estimated that the resource deposit is approximately 1,000,000 units. The depletion rate per unit is computed as follows:
![Page 45: Environmental Accounting](https://reader035.vdocument.in/reader035/viewer/2022062314/55cf98fd550346d0339addfc/html5/thumbnails/45.jpg)
Example (cont’d)
Depletion rate per unit = P15,000,000
1,000,000units
= P15
If 350,000 units are extracted in the first year of operations, then the depletion for the year is P5,250,000, computed by multiplying the production of 350,000 units by the rate of P15.
The entry to record depletion is:
Depletion P5,250,000 Accumulated Depletion P5,250,000
![Page 46: Environmental Accounting](https://reader035.vdocument.in/reader035/viewer/2022062314/55cf98fd550346d0339addfc/html5/thumbnails/46.jpg)
Example (cont’d)
In the income statement, the depletion is classified as part of the cost of production or cost of sales. If a statement of financial position is prepared at the end of the first year, the wasting asset would be shown as a separate line item as follows:
Resource deposit, at cost P15,000,000 Accumulated depletion (5,250,000) Carrying Amount P9,750,000
![Page 47: Environmental Accounting](https://reader035.vdocument.in/reader035/viewer/2022062314/55cf98fd550346d0339addfc/html5/thumbnails/47.jpg)
Revision of depletion rate
Assume that, in the preceding example, additional development costs of 3,750,000 are incurred in the second year, and recoverable deposits are estimated to be 1,350,000 at the beginning of second year.
The depletion rate per unit for the second year is computed as follows:
Original cost of wasting asset:
Original cost of wasting asset P15,000,000 Additional development costs in second year 3,750,000 Total P18,750,000 Accumulated depletion (5,250,000) Remaining depletable amount P13,500,000
Depletion rate per unit (13,500,000/1,350,000 units) = P10
If 300,000 units are extracted in the second year, the entry to record the depletion for the period is:
Depletion P3,000,000 Accumulated Depletion P3,000,000
![Page 48: Environmental Accounting](https://reader035.vdocument.in/reader035/viewer/2022062314/55cf98fd550346d0339addfc/html5/thumbnails/48.jpg)
Depreciation of Mining Property
The depreciation of equipment used in mining operations is based on the life of the equipment or the life of the wasting asset, whichever is shorter.
If the life of the equipment is shorter the straight line method of depreciation is normally used and the output method is used.
![Page 49: Environmental Accounting](https://reader035.vdocument.in/reader035/viewer/2022062314/55cf98fd550346d0339addfc/html5/thumbnails/49.jpg)
Example
A natural resource deposit is estimated to contain 450,000 units. Heavy equipment necessary to extract the deposits is acquired at a cost of P9,000,000. The life of the equipment is 10 years.The depreciation for the first year is computed as follows:
Depreciation per unit (9,000,000 / 450,000 units) = P20
Depreciation (50,000 units extracted x P20) = P1,000,000
![Page 50: Environmental Accounting](https://reader035.vdocument.in/reader035/viewer/2022062314/55cf98fd550346d0339addfc/html5/thumbnails/50.jpg)
Shutdown
In the preceding example, if there is a shutdown in the second year, the depreciation is determined as follows:
Equipment, at cost P 9,000,000 Accumulated depreciation (1,000,000) Carrying Amount (beginning of 2nd year) P8,000,000
• In the year of the shutdown, the remaining carrying amount of the equipment is divided by the remaining life of the equipment to arrive at the depreciation.
Depreciation for second year (8,000,000/9 years) = P888,888
![Page 51: Environmental Accounting](https://reader035.vdocument.in/reader035/viewer/2022062314/55cf98fd550346d0339addfc/html5/thumbnails/51.jpg)
Shutdown cont’d
Operations are resumed and 60,000 units are extracted, the depreciation on the equipment is computed as follows:
Equipment, at cost P9,000,000 Accumulated depreciation (1,000,000 +888,888) (1,888,888) Carrying Amount (beg of third year) P7,111,112
Original estimate of deposit 450,000
units Less: Extracted in first year 50,000
units Remaining estimate if deposit 400,000
units
Depreciation rate per unit (7,111,112/400,000 P 17.78 Depreciation for the third year (60,000 units x 17.78 P1,066,800
![Page 52: Environmental Accounting](https://reader035.vdocument.in/reader035/viewer/2022062314/55cf98fd550346d0339addfc/html5/thumbnails/52.jpg)
Wasting asset doctrine
A wasting asset corporation or an entity engaged in the extraction of a natural resource can legally return capital to shareholders during the lifetime of the corporation.
Can pay dividend not only to the extent of retained earnings but also to the extent of accumulated depletion.
![Page 53: Environmental Accounting](https://reader035.vdocument.in/reader035/viewer/2022062314/55cf98fd550346d0339addfc/html5/thumbnails/53.jpg)
ACCOUNTING PECULIARITIES
Royalty feesThese are payments to the indigenous
cultural community as part of a trust fund for their socio-economic well being, upon utilization of the minerals by the entity.
Valuation: At least 1% of gross revenue if ancestral land is developed for mining from the Social Development Provisions Of The Mining Act of 1995 of the Philippines.
![Page 54: Environmental Accounting](https://reader035.vdocument.in/reader035/viewer/2022062314/55cf98fd550346d0339addfc/html5/thumbnails/54.jpg)
ACCOUNTING PECULIARITIES
Provision for mine rehabilitation fundFund to rehabilitate an excavated mined-out,
tailings covered and disturbed areas to the condition of environmental safety.
Valuation: VariablePenalty: Failure to fulfill the above obligation
shall mean immediate suspension or closure of the mining activities of the contractor/permittee concerned.
![Page 55: Environmental Accounting](https://reader035.vdocument.in/reader035/viewer/2022062314/55cf98fd550346d0339addfc/html5/thumbnails/55.jpg)
ACCOUNTING PECULIARITIES
Environmental Protection Fund
a) A national environment protection fee in an amount equivalent to ten percent (10%) of the total fees charged, but not more than One hundred pesos (P100.00) for every business or non-business permit or license issued by the government.
b) An allocation equivalent to ten percent (10%) of the total unclaimed bank balances escheated in favor of the State under Republic Act No. 3936
![Page 56: Environmental Accounting](https://reader035.vdocument.in/reader035/viewer/2022062314/55cf98fd550346d0339addfc/html5/thumbnails/56.jpg)
ACCOUNTING PECULIARITIES
Decommissioning restoration and environmental rehabilitation fund
Purpose is to segregate assets to fund some or all of the costs of decommissioning plant.
Recognition: The contributor shall recognize its obligation to pay decommissioning costs as a liability and recognize its interest in the fund separately unless the contributor is not liable to pay decommissioning costs even if the fund fails to pay
![Page 57: Environmental Accounting](https://reader035.vdocument.in/reader035/viewer/2022062314/55cf98fd550346d0339addfc/html5/thumbnails/57.jpg)
ACCOUNTING PECULIARITIES
IFRIC 20 – Stripping Costs in the Production Phase of a Surface
If the benefit from the stripping activity will be realized in the current period, an entity is required to account for the stripping activity costs as part of the cost of
When the benefit is the improved access to ore, the entity should recognize these costs as a non-current asset
After initial recognition, the stripping activity asset is carried at its cost or revalued amount less depreciation or amortization and less impairment losses,
![Page 58: Environmental Accounting](https://reader035.vdocument.in/reader035/viewer/2022062314/55cf98fd550346d0339addfc/html5/thumbnails/58.jpg)
ACCOUNTING PECULIARITIES
Mine Wastes and Tailings FeesA semi-annual fee imposed on all operating
mining companies. The mine wastes and tailings fee shall accrue to a reserve fund to be used exclusively for payment for damages to:
![Page 59: Environmental Accounting](https://reader035.vdocument.in/reader035/viewer/2022062314/55cf98fd550346d0339addfc/html5/thumbnails/59.jpg)
ACCOUNTING PECULIARITIES
Occupation Fees(a) For exploration permit - Five pesos (P5.00)
per hectare or fraction thereof per annum;
(b) For mineral agreements and financial or technical assistance agreements - Fifty pesos (P50.00) per hectare or fraction thereof per annum; and
(c) For mineral reservation - One hundred pesos (P100.00) per hectare or fraction thereof per annum.