The International Oil Gas Accounting/Financial Management Immersion Workshop 2015 covers topics such as:
- IFRS fundamentals
- Selection of accounting policies (IAS 8)
- The conceptual framework
- Overview of successful efforts vs. full cost methods
- Fundamental Concepts of Oil and Gas Accounting Methods
- Scale of operations
- The Characteristic Features of the Oil and Gas Industry
- Risks
- Nature and timing of cash flows
- The impact of different contracting and commercial arrangements on financial reporting
- Determination of success
- Interaction between IFRS and national oil and gas reporting practices as developed by US and other countries
- Definitions of reserves and resources
- Accounting for exploration and evaluation
- Accounting for pre-exploration expenditures
- IFRS definitions of tangible and intangible assets (IAS 16 and IAS 38) and scope exclusions
- The role of financial professionals in supporting economic appraisal and methods used
- Review of purpose and nature of IFRS 6
- Full cost methods of accounting during the exploration and evaluation stage, comparing US GAAP treatments to those permitted under IFRS 6
- Planning and budgeting for exploration and evaluation
- Treatment of non-drilling exploration activities, dry holes, appraisal activities, impairment reviews of unproved property and upon completion of evaluation
- Successful efforts methods during exploration and evaluation, comparing US GAAP treatments to those permitted under IFRS 6
- Comparison of benchmark methods to other treatments found under IFRS
- Presentation of financial statements by IFRS reporters
- Influence on presentation of past practices and regulatory listing requirements
- Application of IAS 1 presentation, and IAS 7 cash flows and IFRS 8 segment reporting
- Nature of oil and gas operations and setting up an appropriate chart of accounts
- Introduction to reporting of oil and gas operations, properties and reserves
- Borrowing costs
- When to commence and cease capitalization
- Application of IAS 23, capitalization of borrowing costs to exploration and development
- What rate to use
- Accounting for development
- Planning and budgeting during the development phase
- Distinguishing between development activities and exploration or production activities
- Application of impairment methods under IAS 36
- Treatment of dry holes and unanticipated expenditures
- Cost allocation methods
- Application of IAS 38 and IAS 16 to development phase activities
- Production
- Workovers and recompletions
- Stores and warehouse inventory
- Asset impairment during the production phase
- Methods of depreciation, depletion, and amortization; defining the cost centre, which reserves to use, how to adjust the numerator, shared production, depreciating common facilities
- Retirement obligations / decommissioning
- Application to environmental damage
- Review of provision principles in IAS 37
- Creation of rehabilitation funds (IFRIC5)
- Application to asset retirement obligations, when to commence recognition, how to estimate the liability, what discount rate to use, how to account for changes in estimates
- Revenue recognition
- Application of IAS 18 to recognition (production, lifting, production inventory (IAS 2))
- Review of IAS 18 Revenue Recognition (or its replacement IFRS when issued and effective)
- Application of other relevant IFRS`s to expenditures during exploration, development and production
- Use of contractors and leased property and equipment (application of IAS 17 and IFRIC 4)
- Identification of functional currency and treatment of foreign currency transactions (application of IAS 21)
- Wages, salaries and other benefits, including pensions and repatriations costs (overview of IAS 19)
- Reporting of reserves
- Best practices from other IFRS reporters
- Supplementary disclosure requirements relating to oil and gas producing activities required by SEC and other regulators including COGEH
- Where to find key data relating to firms` exploration and production activities
- SEC Oil & Gas Modernization Act
- Costs incurred for property acquisition, exploration & development activities
- Proved oil and gas reserve quantities
- Update on the IASB`s Project for Extractive Industries Financial Reporting
- The standardized measure of discounted future net cash flows (`PV10`)
- Management accounting
- Identifying the audience(s) for management accounting information
- Selection of management accounting policies
- Selecting cost centres
- Creating a chart of accounts
- Expenditure reporting vs. commitment reporting
- Selecting cost elements
- Reporting capital expenditures
- Reporting expenses
- Detail of reporting
- Management Accounting Procedures
- Overhead allocation
- Frequency of reporting
- Responsibility accounting
- Taxation of oil and gas
- Distinguishing between revenue bases taxes and income based taxes
- Typical tax regimes
- Accounting for taxation under IAS 12, including super taxes
- Accounting for and presentation of revenue based taxes
- Application of IAS 12 to oil and gas assets and decommissioning liabilities
- Performance metrics
- Computation of metrics using published property, reserves and operational information
- Review of typical metrics used by analysts (internal and external)
- Production sharing agreements (PSA/PSC)
- What are the typical provisions within a PSA and how do they differ
- What are PSA`s and where are they found?
- Cost oil and profit oil and revenue share
- Running the economics of a PSA, impact on reserves, production
- Accounting and reporting procedures including reconciliations and audit
- Pre and post-tax arrangements including tax barrels and pay on behalf of regimes
- Treatment of activities outside the scope of PSA
- Understanding the differences between IFRS treatments and PSA treatments of capex, opex, recoverable and unrecoverable costs
- Comparison with treatments under other contractual arrangements (risk sharing and technical service agreements)
- IFRS treatment of oil and gas assets, reporting of reserves and calculating DDA in PSAs
- Joint operations and joint ventures
- Nature of joint venture and joint operations
- Reasons for joint arrangements in the industry
- Best practices in accounting procedures
- Accounting procedures between operators and partners in the contracting group including application of IFRS 11, and cash calls, billing statements and cut back entries
- Under and over lift and methods of diverse methods of accounting for it
- Accounting for contributions by the venturers
- Identification of joint ventures (entities) and accounting for them under IAS 28 in the economic entity and separate financial statements
- Accounting for acquisitions, asset exchanges and conveyances
- Identification of asset acquisitions from business combinations (application of IFRS 3) and impact upon accounting
- Typical types of acquisition, exchange and conveyances within the industry
- Asset exchanges in the exploration phase, relevance of US GAAP treatments in an IFRS environment
- Recognition and measurement of goodwill arising from business combinations
- Asset exchanges involving cash consideration and partial and full disposals of properties
- Treatments of pooling of interests, unitizations and farm-in, farm-out arrangements, comparing US GAAP treatments to treatments emerging under IFRS
- Financial instruments
- Classification and measurement under IAS 39 and IFRS 9
- Nature of financial instruments found in upstream companies
- Hedging of oil and gas prices and FX risk
- Use of derivatives
- First time adoption issues
- Understanding the key exemptions
- Review of main principles in IFRS 1
- Specific exemptions available to oil and gas reporters
The International Oil Gas Accounting/Financial Management Immersion Workshop 2015 is intended for:
- Management accountants of IOC’s and NOC’s
- Financial accountants in the oil and gas industry
- Staff of revenue authorities and NOC’s working with IOC’s
- Internal and external auditors of oil and gas companies reporting under IFRS
