Mr. Hall reports on the Securities and Exchange Commission's rejection of its staff's proposal to abolish full costing for publicly-held companies.

Current Developments in Financial Accounting. Hall, James D., Fall/Winter 1986, pp. 1‑2.

Mr. Mark summarizes the major provisions of the 1986 Tax Reform Act that are of special importance to the oil and gas industry. These topics include the elimination of percentage depletion on bonuses, the reduction of immediate IDC expensing by integrated companies, the elimination on expensing of foreign IDC on productive wells, the extension of the alternative minimum tax, the recapture of IDC and depletion, and certain changes for producers of hard-rock minerals. Mr. Mark also reviews recently-issued WPT regulations.

Current Developments in Oil and Gas Taxation. Mark, Richard, Fall/Winter 1986, pp. 3‑6.

The Tax Reform Act of 1984 added several provisions to the Internal Revenue Code to identify and penalize "abusive tax shelters" and their promoters and participants. The Tax Reform Act of 1986 made minor changes in the existing tax shelter registration rules. Mr. Pershall discusses the tax shelter registration provisions as they affect the oil and gas industry, with special emphasis on investments subject to registration, responsibility for registration, maintenance of investor lists, and penalties.

Tax Shelter Registration and the Oil and Gas Industry. Pershall, Keith E., Fall/Winter 1986, pp. 7‑18.

One of the least appreciated and least understood income tax credits in the Internal Revenue Code is the credit for tight sands gas production, found in Section 29 of the IRC. The credit may result in substantial savings in energy producers' tax liabilities. The authors explain the availability of the credit, how it is computed, and the limitations on the credit.

Credit for Tight Sands Gas Production. Metz, LeRoy and Eicher, Jeffrey D., Fall/Winter 1986, pp. 19‑24.

Mr. Lawrie summarizes a Guideline for Canadian enterprises who use the full cost accounting method recently issued by the Canadian Institute of Chartered Accountants. Although the basic rules adopted in the Guideline are almost identical to those required in the United States, the approach to computing the cost ceiling may be significantly different.

Canadian Full Cost Accounting in the Oil and Gas Industry. Lawrie, Henry R., Fall/Winter 1986, pp. 25‑28.

This article reports on a survey of full-cost companies conducted this fall when the SEC was considering eliminating full costing as an acceptable accounting practice for publicly-held companies.

Survey of Companies Using Full Cost Method of Accounting. Moore, C. H. and Runge, John, Fall/Winter 1986, pp. 29‑38.

In this article the authors explain the nature of futures contracts and how they are used for hedging and speculation. Petroleum accountants and managers will be especially interested in hedging transactions. The accounting and tax implications are then discussed.

Petroleum Futures: An Overview for the Practitioner. Chandy, P. R.; Choi, In Suk; and McIntosh, Willard, Fall/Winter 1986, pp. 39‑58.

Mr. Tristan points out the growth in "spot sales" and direct sales to local distribution companies. He examines certain accounting problems rising from the increase in such sales. These problems are related to gas allocation procedures, revenue valuation, royalty payments, and severance taxes.

Special Problems Associated with Direct/Spot Sales to End Users/Local Distribution Companies. Tristan, Salomon, Fall/Winter 1986, pp. 59‑64.

The authors suggest that there is a genuine demand for the information provided for Reserve Recognition Accounting and that the arguments of the accounting profession and oil managers that RRA data are too subjective to be useful may be unfounded. These conclusions are based on an analysis of behavior of the price of stock of 51 companies at dates surrounding the 1978 RRA filings and earnings announcement dates (the first reports in which RRA data were required to be filed).

Information Content of RRA vs. Historical Cost-Based Data. Bell, Timothy B.; Boatsman, James R.; and Dhailwal, Dan S., Fall/Winter 1986, pp. 65‑82.

Messrs. Deakin and Limberg examine the question of whether revenue should be recognized at the time of production or only when a sale has taken place, a question that has been the central issue in a large number of legal cases in recent years. The authors then discuss the implications of revenue recognition in such policy issues as state income taxes, the windfall profit tax, and crude oil exchanges.

Production Revenue Recognition for Integrated Oil and Gas Producers: Accounting, Taxation and Policy Issues. Deakin, Edward B. and Limberg, Stephen, Fall/Winter 1986, pp. 83‑100.

Recently the proper treatment of interest costs in computing the net income limitation for purposes of the windfall profit tax has led to controversy between the IRS and taxpayers. Dr. Crumbley discusses the general process for allocating overhead (including interest expense). He analyzes the tracing concept, discusses the fungibility of interest, and examines the question of netting interest expense and interest income.

Proper Treatment of Interest Expense with Respect to the Net Income Limitation of the Windfall Profit Tax. Crumbley, D. Larry, Fall/Winter 1986, pp. 101‑110.

In the Fall/Winter 1985 edition of the Journal of Petroleum Accounting , Mr. Kelly explored the special rules governing oil and gas partnerships in the proposed Section 704(b) regulations that were issued in March, 1983. In this article Mr. Kirkland examines the special rules pertaining specifically to oil and gas partnerships contained in the final Section 704(b) regulations issued on December 31, 1985, with special emphasis on the most substantial changes from the proposed regulations.

An Introduction to Oil and Gas Partnership Allocations under the Final Section 704(b) Regulations. Kirkland, Belly J., Fall/Winter 1986, pp. 111‑121.