BC29 The IFRS permits an entity recognising exploration and evaluation assets to measure such assets, after recognition, using either the cost model or the revaluation model in IAS 16 and IAS 38. The model chosen should be consistent with how the entity classifies the exploration and evaluation assets. Those revaluation models permit the revaluation of assets when specified requirements are met (see paragraphs 31-42 of IAS 16 and paragraphs 72-84 of IAS 38). The revaluation model in IAS 38 can be used only if the asset's fair value can be determined by reference to an active market; the revaluation model in IAS 16 refers only to 'market‑based evidence'. The Board was troubled by this inconsistency and was concerned that entities might choose accounting policies to achieve a more advantageous measurement of exploration and evaluation assets.

BC30 A few respondents were also concerned with the option proposed in ED 6. Some did not agree that exploration and evaluation assets should be revalued, preferring an arbitrary prohibition of remeasurement. Others were concerned about the reliability of the measure. The Board concluded that no substantive reasons had been presented for reaching a conclusion different from that in ED 6. Although the revaluation of an exploration asset in accordance with IAS 16 or IAS 38 might not be widespread, it was not appropriate to prohibit remeasurement of specific types of IAS 16 or IAS 38 assets on a selective basis.