SEC bulletin on oil and gas accounting

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01 Nov 2009

The Office of the Chief Accountant of the US Securities and Exchange Commission has issued updated guidance on how the agency's staff interprets accounting rules related to the oil and gas industry.

These updates correspond with rulemaking that the SEC approved in December 2008 to modernise its oil and gas company reporting requirements to help investors evaluate the value of their investments in these companies.

The revisions of the guidance, known as Staff Accounting Bulletin No. 113, include:

  • changing the price used in determining quantities of oil and gas reserves;
  • eliminating the option to use post-quarter-end prices to evaluate write-offs of excess capitalized costs under the full cost method of accounting;
  • removing the exclusion of unconventional methods used in extracting oil and gas from oil sands or shale as an oil and gas producing activity; and,
  • removing certain questions and interpretative guidance which are no longer necessary.
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