Financial Accounting

Aims to enhance your knowledge of financial accounting and reporting issues which are unique to the E&P industry. Particular emphasis will be placed on achieving a thorough understanding of various accounting standards that apply to the industry. Comparisons are made between International, UK and USA practice and to other countries. Reference will be made to relevant IFRS, FAS and FRS documents. You will refer to examples from E&P company accounts and seeand understand the impact of adopting different accounting policies.

It is not a pre-requisite that you have previously attended our Level 1 course but this normal progression is strongly recommended. The Level 2 course should be attended by:

• those who have attended our Level 1 course and who now feel ready to progress to a more advanced level of knowledge and understanding
• those with a good foundation knowledge in the subject area of each module.

Companion courses available are Exploration and Production Accounting Level 1, Exploration and Production Accounting Level 3 and Auditing in the Exploration & Production Industry.

Regulation of oil & gas company accounting
• Appreciating the need for standards, the sources of standards applicable to E&P companies and the underlying principles.

Accounting for Pre-Development Costs
• Understanding policy choices and accounting standards on pre-licence, exploration and appraisal costs.

Commercial Reserves
• Appreciating the nature of commercial reserves and their significance in accounting.

The DD&A Calculation
• Calculating DD&A on a Unit of Production basis.

Dealing with changes in costs and reserve estimates.

Impairment or Ceiling Tests
• Testing for impairment of assets. Comparison of IAS 36, FAS 121, and FRS 11 requirements.

Accounting for Decommissioning
• Accounting policy choices on provisions for decommissioning. Comparison of IAS 37, FAS 143 and FRS12 requirements.

Accounting Disclosures
• E&P company cash flows, standardised measure and other industry-specific accounting disclosures.

Accounting for Financing Arrangements
• Recommended practice on accounting for E&P company financing and risk-sharing arrangements such as Farm In/Farm Out and Carried Interests.

Accounting for Sales Revenue
• Recommended practice on accounting for oil and gas sales. The timing of revenue recognition and matching of costs for under/over liftingof entitlement and take or pay gas sales agreements.

Accounting for E&P Company Taxes
• Introduction to types of E&P taxes. Deferred tax accounting.

Analysis of Financial Performance
• Measuring and analysing E&P company financial performance.

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