IFRS 6 allows companies to only perform impairment testing on exploration & evaluation (E&E) assets if there are certain indicators of impairment. Usually impairment is measured at the cash generating unit on a regular basis regardless of indicators.

What does a mining company that has primarily these E&E assets do for impairment for the rest of its assets? If all the other assets (say property plant and equipment) belong to the same cash generating unit as the E&E assets, does the company only measure for impairment when there are indicators? Or does it have to measure the property plant and equipment regularily? How would it do that if the PP&E on its own don’t generate independant cash flows?

Thanks – interested to hear from anyone with experience with this scenario.

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