ALTERNATIVE RESERVE REPORTING AND EXPLORATION ACCOUNTING METHODS—THE NEED FOR INTERNATIONAL ACCOUNTING STANDARDS

摘要

The objective of this paper is to analyse the different reserve reporting and exploration accounting methods used globally and highlight the key reporting implications for companies that are domiciled in Australia. This has become a critical issue in the oil and gas sector with the impending implementation of International Accounting Standards (IAS), as these standards as they now stand, do not specifically address the oil and gas industry. As a result companies may have the option or may be required to make significant changes to existing accounting and reporting practices. The paper will analyse the issues, potential implications, and opportunities within the following areas: 1. A brief summary of the history of oil and gas accounting standards and the status of existing IAS. 2. The different reserve reporting practices for exploration accounting and reserve reporting practices between the United States (US), United Kingdom (UK), and Australia, including the different interpretations of reserves within the countries. 3. The alternative accounting outcomes for exploration expenditure depending upon whether successful efforts are applied, area of interest, or full cost accounting. 4. The relationship between reserve reporting and exploration accounting, with examples of how multiple accounting outcomes may result from the same exploration program. 5. Discuss the actions required by oil and gas executives to best manage the issues. The paper will be written and presented in a style such that non-accountants or reserve experts will be able to understand the issues. Detailed analysis of technical issues and industry specific references will be avoided e.g. accounting jargon. The paper will be of most value to representatives of Australian independent oil and gas companies, but would also be of interest to international companies.