This 3-day course will provide an in depth overview of the key accounting issues that faces the upstream exploration and production, covering the essence of establishing good accounting practices for both joint venture and production sharing contract in the Oil & Gas industry. In addition, the course will address the key complex accounting issues related to the Revenue recognition, conveyances, rehabilitation, drilling contracts and AFE system. Participants will benefit through specific understanding and of current industry accounting practices, corporate reporting and financial analysis reinforced with real world Oil & Gas case studies learning and daily exercises.
The program addresses questions raised in the industry such as:
- What are the different forms of Joint Arrangements and how should the venture account for each type?
- How to account for the different forms of Joint Operating Agreements?
- What are the accounting procedures for Joint Operating Agreements?
- What does US GAAP have to say about asset exchanges and conveyances of oil and gas interests?
- How to allocate the costs between ventures and record the material transactions between ventures?
- What are the main revenue recognition issues faced by the industry?
- How production sharing agreements should be accounted for?
- How the Joint Interest Billing and Cash Calls are accounted for?
- How to account for rehabilitation funds under US GAAP?
- UNDERSTAND the general principles of accounting for Conveyances
- MASTER the accounting for Farmouts, Carried Interests and Unitizations.
- UNDERSTAND the application of accounting for Partnership Interest
- DEVELOP an understanding on international operations, the general risks, the role of E&P subsidiaries, the accounting issues and the financial accounting for Product Sharing Contracts (PSC).
Session 1- Accounting for joint arrangements:
- IFRS 10 consolidations
- Defining control
- IAS 27 separate financial statements
- IAS 28 associates and join ventures
- IFRS 11 joint arrangements
- IFRS 12 disclosures of interests in other entities
- Equity method accounting
- Properties included in joint operations
- Joint operating agreements
- Joint interest billing
- Joint interest audit
Session 2- Accounting for conveyances:
- IAS 16/38 acquisition of PP&E/intangible assets
- IFRS 6 exploration & evaluation assets
- IAS 32/37, IFRS 9 financial instruments
- Types of conveyances
- Farm-ins and farm-outs
Session 3- Production sharing agreements:
- Typical PSA provisions
- PSA accounting and reporting
- Typical recoverable and non-recoverable costs
- Accounting issues for PSAs
- PSA audits
- Decommissioning obligations and rehabilitation funds
Session 4- Revenue recognition issues:
- Revenue recognition criteria
- Under and over-lift imbalances
- Asset exchanges
Session 5- Exploration phase:
- Financial reporting methods
- Full cost vs. successful efforts
- IFRS approach
- IFRS 6 and pre-exploration expenditures
- Classification of assets