Oil and gas accounting

Oil and gas accounting guides

• Oil and gas accounting: the key IFRS issues4 minute readOil and gas accounting explained: exploration under IFRS 6, depletion, decommissioning, impairment, production sharing contracts and joint operations.
• IFRS 6 exploration and evaluation4 minute readIFRS 6 explained: which exploration and evaluation costs can be capitalised, pre-licence costs, impairment triggers and reclassification on discovery.
• Successful efforts vs full cost4 minute readSuccessful efforts vs full cost in oil and gas: how each treats dry holes and exploration, the ceiling test, what IFRS allows, with a four-well example.
• Decommissioning provisions in oil and gas4 minute readDecommissioning provisions in oil and gas: when they arise, discounting, adding the cost to the asset, IFRIC 1 changes, deferred tax, with a worked example.
• Depletion and the units of production method4 minute readUnits of production depletion in oil and gas: the formula, choosing a reserves base, future development costs, reserve revisions and a worked example.
• Impairment of oil and gas assets4 minute readOil and gas impairment under IAS 36: triggers, cash-generating units, value in use or fair value, price assumptions, decommissioning and reversals.
• Production sharing contracts4 minute readProduction sharing contracts explained for contractors: cost oil, profit oil, entitlement barrels, revenue, taxes paid on your behalf, bonuses and reserves.
• Joint operating agreements in oil and gas5 minute readJoint operating agreements in oil and gas under IFRS 11: joint operations, the operator's books, cash calls, overlift and underlift, leases and farm-ins.
• Overlift and underlift4 minute readOverlift and underlift explained: why lifting imbalances arise, the sales method under IFRS 15, measuring imbalances at cost or market value, an example.
• Crude oil and product inventory4 minute readCrude oil inventory under IAS 2: FIFO or weighted average, net realisable value write-downs, linefill and tank bottoms, traders and replacement cost profit.
• Take-or-pay contracts4 minute readTake-or-pay contracts explained: seller revenue and make-up rights under IFRS 15, breakage, the buyer's prepayment, own use, embedded leases and derivatives.
• Royalties and petroleum taxes4 minute readRoyalties and petroleum taxes in oil and gas: which are income taxes under IAS 12, which are levies, how royalties are presented, and deferred tax.
• Hedging oil and gas prices4 minute readOil price hedging under IFRS 9: cash flow hedges of forecast sales, swaps and collars, hedging the Brent component, ineffectiveness and own use, an example.

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About these guides

Each guide starts from an accounting issue oil and gas companies actually face and works through it with numbers from the industry. 13 of 13 planned guides are published; more are added with every batch.