IFRS Based Accounting for Oil and Gas Training

Day 1 

Introduction to the E&P industry

•    Learn what is different about the exploration and production industry and the impact this has on accounting and financial management.

•    Examples from the industry: why it needs separate accounting standards

•    International Financial Reporting Standards

•    Financial Accounting Standards Board Standards

Accounting policies

•    What are accounting policies and who sets them?

•    How do accounting policies influence the reporting of financial performance

•    How to account for decommissioning costs

The Importance and Value of Oil and Gas Reserves

•    The use of reserve data in accounting calculations

Petroleum Agreements: Royalty/Tax v PSCs: Emphasis on Royalty Tax Regimes 

•    Overview

•    Where the entity bears the exploration risk

•    Where the entity bears the conceptual performance risk

General overview of the oil and gas industry in relation to entitlements, royalty, cost recovery, statutory requirements 

•    Understanding the regulatory framework for the fiscal regime in the upstream oil and gas industry

•    Understanding the concept of petroleum sharing including the concept of Additional Oil

Entitlement or windfall tax

•    Pricing of petroleum and transfer pricing considerations.

•    Corporate income tax determination and compliance matters.

•    Capital gains tax considerations

Evaluation and Exploration/Appraisal cost/assets 

•    Overview

•    Comparison of FAS 19 and IFRS 6

•    Distinction between successful efforts and full cost methods

•    Accounting for Exploration and Evaluation cost under IFRS 6

•    Initial recognition of Exploration and Evaluation under IFRS 6 exemption

•    Subsequent measurement of Exploration and Evaluation assets

•    Impairment of Exploration and Evaluation assets

•    Suspended wells

•    Post balance sheet events

•    Accounting for development expenditure

•    Other: application of IFRS 6 to the value chain

•    Disclosures

Day 2

Intangible assets 

•    Overview

•    Overall recognition

•    Internally generated and separately acquired intangible assets

•    Intangible assets acquired in a business combination

•    Commons issues related to intangible assets

•    Disclosures

Property, plant and equipment: Oil and Gas (Development and Production)

•    Overview

•    Initial measurement

•    Depletion, Depreciation and Amortisation (Units of Production basis and Change in the basis of reserves): Upstream

•    Depreciation of downstream assets

•    Disclosures

Day 3

Impairment of development, production

•    Overview

•    Impairment indicators

•    Cash generating units

•    Fair value less cost to sell (“FVLCTS”)

•    Value in use (“VIU”)

•    Shared assets

•    Interaction of decommissioning provisions and impairment testing

•    Asset Retirement Obligation

•    Goodwill impairment testing

•    Impairment reversals

•    Disclosure

Joint Arrangements: Joint venture & Joint operations 

•    Overview of joint arrangements

•    Joint control

•    Classification of joint ventures

•    Accounting for jointly controlled assets

•    Accounting for jointly controlled operations

•    Accounting for jointly controlled entities

•    Changes in ownership in a joint arrangement

•    Investments with less than joint control

•    Farm outs

•    Disclosures

Revenue recognition 

•    Overview

•    Revenue recognition: Upstream (overlift & underlift and pre production sale)

•    Revenue recognition: Midstream and downstream (product exchanges and oil fields services)

•    Presentation and disclosure