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IFRS Based Accounting for Oil and Gas Training

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Course Information

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

This course is introductory to intermediate in nature and it has been designed to provide a good level of knowledge and practice across the main aspects of IFRS based accounting in the Oil & Gas industry.

During this intensive three day course, delegates will be exposed to a variety of fiscal regimes, with the opportunity to discuss the fiscal regime in their own jurisdiction. The course discusses successful effort and full cost accounting techniques, with reference to IFRS and FASB accounting standards.

In addition, delegates will also learn about intangible assets and their importance in the Oil & Gas industry as well as the fundamentals of Property, plant and equipment: Oil and Gas (Development and Production).

The impairment of development and production assets is a vital topic for the Oil & Gas industry and delegates will see these matters in action during the course.

Many Oil & Gas industry arrangements are based on Joint Arrangements: Joint venture & Joint operations and delegates will explore these aspects in detail in order that they can understand apply the rules found in several IFRS once they return to work.


Finally, revenue recognition, which has been a matter of research and development by various accounting standards bodies for a decade and more has culminated in IFRS 15: delegates will spend some time in discussing this standard and its implications for the future

By the end of the course, delegates will be able to

Appreciate the E&P industry

Determine how accounting policies are set

Review the Importance and Value of Oil and Gas Reserves

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

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

Apply Evaluation and Exploration/Appraisal cost/assets

Define and Evaluate Intangible assets

Review and Apply Property, Plant and Equipment Accounting Rules for Oil and Gas

Apply Impairment of Development and Production Assets

Understand and Review Joint Arrangements: Joint venture & Joint operations

Review Revenue Recognition

Anyone requiring an introductory to intermediate understanding of IFRS Based Accounting for Oil and Gas

•    Finance staff new to the industry who require a grounding in the various specialist discipline areas that typically comprise an oil and gas company finance function

•    Finance personnel who are being developed for broader accounting and financial management responsibilities

•    Audit and information systems staff who have frequent dealings with financial controls and systems

•    Treasury and tax specialists who require a better understanding of E&P finance and accounting

•    Financial staff in need of a refresher in the IFRS Based Accounting for Oil and Gas

Continuing Professional Development