Stage 9 · Special cases
CAS-23: Overburden Removal Cost
To reach one tonne of limestone you first move three cubic metres of earth. Whose cost is that, this year’s or next year’s?
What you will learn in CAS-23
- Overburden and stripping ratios (§4)
- Development vs production phase (§§5.4, 5.5)
- In-house vs outsourced, assignment and disclosure (§§5.6–8)
Chapters
- Moving the mountain first · Charge this year only its fair share of digging (§§4, 5.1–5.5)
- Own diggers or a contractor? · Count the right costs and share them fairly (§§5.6–5.10, 6, 7, 8)
- Spot the mistakes in the quarry’s cost sheet · Three mistakes are hiding (§§5.4, 5.5)
Key terms
- Overburden removal cost (§§4, 5.1–5.5): Everything spent removing overburden: own machines, workers, fuel, or contractors. Before regular production it is added to the quarry as an asset. During production it is charged on the standard ratio; the gap between actual and standard is carried forward and adjusted.
- Measuring and sharing removal cost (§§5.6–5.8, 6.2, 6.3, 8): Own removal includes materials, workers, running the machines and their depreciation. A contractor’s removal is the contract price. Share it between minerals on a suitable basis. Disclose the stripping ratios and the amount carried forward.
Common questions
How is overburden removal cost charged under CAS-23?
In the development phase it is capitalised; in the production phase it is charged on the standard stripping ratio, with differences between actual and standard adjusted (paras 5.4, 5.5).
CAS-23, Overburden Removal Cost. Checked against the standard in November 2026. The limestone quarry and every figure in this lesson are fictional. Read the official text on the ICMAI Cost Accounting Standards page ↗ before applying it to real work.