Exposure Draft 92: tangible natural resources. A critical technical review

Abstract

The treatment of tangible natural resources in financial statements is a matter of concern; hence the publication of this exposure draft. This paper reviews and critiques this. In doing so, it shows that identification and valuation is such assets is far from certain. It argues that general principles are all that can be identified rather than definite approaches. This is because of the uncertainty involved and the differences between organisations. So, it argues for use value rather the historic cost as the basis for recording items. The paper discusses the problems of identifying such resources and of their measurement in arriving at their treatment in financial statements. It then goes on the argue that sustainability and accounting in terms of sustainability are the problem to be addressed for the future, stating that this issue will become more important as time progresses. In doing so, it discusses the issues involved in sustainability and the issues involved in accounting for sustainability. It argues that this will become more difficult as time progresses but needs to be addressed as some of the most basic principles of recording assets and transactions need to be revisited and redefined in the future because of the concern for sustainability.