ORDER OF THE GOVERNMENT OF THE REPUBLIC OF ARMENIA

of April 2, 2019 No. 293-N

About establishment of procedure for write-off of costs on overburden works for cost of the extracted mineral

Accepted the Government of the Republic of Armenia on March 29, 2019

1. Establish procedure for write-off of costs on overburden works for cost of the extracted mineral according to appendix.

2. This Resolution becomes effective next day after its official publication and extends to the "arisen" relations arising after January 1, 2018.

Appendix

to the Order of the Government of the Republic of Armenia of March 29, 2019 No. 293-N

Procedure for write-off of costs on overburden works for cost of the extracted mineral

1. General provisions

2. In sense of application of this Procedure:

1) each project of production proved by the legal act is object of separate accounting;

2) the below-stated concepts make the following sense and value:

and. vskrysha - removal of dead rocks (overburden breeds) of pit of the mineral operated by open method for receipt of access to mineral inventories;

. asset as regards vskrysha at stage of mountain and capital works - the overburden works which are carried out to the period of construction of pit (prior to operation of pit);

century expenses on vskrysha at pit operational phase - the expenses on vskrysha made later pit constructions;

quantity of vskrysha - amount of the dead rocks removed during vskrysha (overburden breeds).

2. Calculation of asset depreciation as regards vskrysha at stage of development of pit (mountain and capital works) and its write-off on cost of the extracted mineral

3. All costs on vskrysha made at stage of development of pit (mountain and capital works) (prior to operation of the mine) are capitalized as asset as regards vskrysha at stage of development of pit (mountain and capital works). After the beginning of operation of pit the asset as regards vskrysha at pit development stage (mountain and capital works) will be amortized settled) in proportion to production of the general operational inventories of mineral proved by the project of production. Depreciation (repayment) is calculated on the following formula:

AM (ETR.AV.AM (П)) = ST (�­� .А� .Ст) x K(OG.DR.K) / K(OP.ER.OK)

where:

AM (ETR.AV.AM (П)) - depreciation amount (repayments) of asset as regards vskrysha at pit development stage (mountain and capital works);

ST (�­� .А� .Ст) - asset cost as regards vskrysha at pit development stage (mountain and capital works) without deduction of cumulative depreciation amount (repayment);

To (OG.DR.K) - quantity of resources of the mineral extracted for accounting year;

To (OP.ER.OK) - the total quantity of operational resources proved by the project of production without deduction of quantity of the resources got earlier.

4. In case of determination of the total quantity of operational resources proved by the project of production (To (OP.ER.OK)), the change of these resources made in accordance with the established procedure is considered. For calculation of depreciation amount (repayment) of asset as regards vskrysha at pit development stage (mountain and capital works) the specified change is considered in progress, since 1 date including day of making of this change and will be amortized settled) according to the procedure, the stipulated in Item 3 presents of the Procedure where:

ST (�­� .А� .Ст) - asset cost as regards vskrysha at pit development stage (mountain and capital works) after deduction of the depreciation amount (repayment) which is saved up for this date;

To (OP.ER.OK) - the total quantity of operational resources proved by the project of production (taking into account changes), after deduction of quantity of the resources which are actually got after the beginning of operation of pit and before this date.

5. The depreciation amount (repayments) of asset as regards vskrysha at pit development stage (mountain and capital works) within accounting year joins in cost of the mineral extracted within this year.

3. Calculation of expenses on vskrysha at operational phase of pit and their write-off on cost of the extracted mineral

6. Expenses on vskrysha at operational phase of pit include the total amount of the expenses which are directly connected with vskryshy plus other expenses which are written off on vskrysha.

7. The expense amount on vskrysha at pit operational phase within accounting year which can be included directly in cost of the mineral extracted within this year is calculated on the following formula:

�  (OG.RV.SD) = With (Ед� .�­�­.ККВ) x To (OG.DR.K) x With (ОГ.ЕдВ� .ФС)

To (EDR.EE.KKV)= (To (OP.VP.OK) - K(ER.VP. To)) / (To (OP.ER.OK) - To (AYR. WEDNESDAY. To))

With (ОГ.ЕдВ� .ФС) = P (OG.FPVR) / To (OG.FVP.K),

where:

�  (OG.RV.SD) - expense amount on vskrysha at pit operational phase within accounting year which can be included directly in cost of the mineral extracted within this year;

To (Ед� .�­�­.ККВ) - coefficient of quantity of vskrysha at pit operational phase per unit of the got resource (in tons);

To (OG.DR.K) - quantity of the resources got for accounting year;

With (ОГ.ЕдВ� .ФС) - actual cost of unit of the overburden works performed for accounting year (per one ton);

To (OP.VP.OK) - the total quantity of overburden breeds at development stage (mountain and capital works) and operation of pit proved by the project of production in tons;

To (ER.VP. To) - the actual amount of overburden breeds at pit development stage (mountain and capital works), in tons;

To (OP.ER.OK) - total quantity of the operational resources proved by the project of production without deduction of the resources got earlier;

To (AYR. WEDNESDAY. To) - quantity of resources of the extracted mineral (the accompanying resources) connected with quarrying (mountain and capital works) at pit development stage (mountain and capital works);

�  (OG.FPVR) - the total amount of the expenses on vskrysha at operational phase which are actually made within accounting year;

To (OG.FVP.K) - the actual amount of overburden breeds for accounting year.

8. The expense amount on vskrysha at operational phase within accounting year calculated according to this procedure joins in cost of the mineral extracted within this year.

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