Mastering Cost of Natural Resources, PP&E, and Intangible Assets, can be done by properly accounting for it. Natural resources include timber, minerals, oil, and gas deposits. Their benefit is effective upon physical consumption. If purchased, the cost is the purchase price + any other costs to bring the same condition resource to the physical location.
If developed, then the need to account for DEAR is needed, Development, Exploration, Acquisition, and Restoration costs. So, to simplify, consider Restoration costs as an Asset Retirement Obligation or ARO. There must be an existing legal obligation to the disposition or retirement of the asset, it is recognized as a liability (measured by Fair Value), and can be recognized over the life of an asset, or until it is sold/retired.
And provisions to address AROs can be done by remembering the "SRMP" acronym - Scope, Recognition, Measurement, and PV calculations.
So, consider you are looking for hidden treasure in a land for sale. To do so, you have the following DEAR costs, of Development being 100K, exploration being 200K, Acquisition being 500K, and restoration needs to be calculated. Imagine you have two years to pay restoration costs, being financed at 10% annum, and you project year 1 to be 80K at 25% and year 2 to be 100K at 75%.
Therefore, weighted average gets us at 95K Restoration Costs.
Remember, it is important to get the PV calculation for 95K (i=8, n=2), but for this example, we will keep 95K for simplicity purposes.
For the two years, you will have a 9.5K finance expense adding to the restoration cost, and in year 2, you will have 10.45K (95K+9.5K multiplied by 10%).
So, what that means, is you will debit Treasure expenses (in this case the DEA of DEAR), credit cash, and credit your ARO (in this case the R in DEAR).
First entry should be the PRESENT VALUE ARO before the finance charges. As per every year, you will need to debit accretion expenses (the finance charge of restoration costs in this case) and credit your ARO, increasing the obligation. Once you fully know the cost of the ARO, you will need Debit the ARO (potentially debit a loss if you ended up paying more in cash), and Credit Cash (potentially credit a gain if you ended up paying less in cash).