ASIC notes the decision by Medusa Mining Limited (Medusa) to derecognise exploration and evaluation assets of US$56 million in its upcoming financial report for the half-year ended 31 December 2017.  Medusa has changed its accounting policy to expense all exploration and evaluation amounts as incurred.

ASIC raised concerns about the recoverable amount of Medusa’s exploration and evaluation assets in it’s financial report for the year ended 30 June 2017.  These assets had not been taken into account when testing the assets of Medusa’s mining operation for impairment.

As outlined in ASIC media release 17-423MR ASIC calls on preparers to focus on the financial report quality and new requirements, impairment testing and asset values remains a focus area of our financial reporting surveillances.