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Jun 02, 2020 at 10:56 AM

CONCEPT of AMORTIZATION for MINING fields.

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Hi Team,

I have a scenario like this :

Say, we have mining field ( leased for 20 years) and total cost of the mine is Rs 100Cr. And in first year we mined it for 5Cr and in 2nd year we done mining for 8 Cr and in 3rd year its around 15 Cr.

My iise is : if we divide the whole amount to its use full life , then yearly depreciation is say 5Cr but we mine the field at different amounts 5Cr, 8 Cr , 15 Cr and so on and our accounts guy said they have to amortize the asset at same value as they mine.

So, how can i achieve this. How can we maintain this type of asset in SAP. Please guide.

Thanks & Regards,

Karandeep Bhagat.