Mr. Jennings reports that the FASB is considering significant changes to SFAS 96, "Accounting for Income Taxes," and that the Board has tentatively agreed to significant changes in the Exposure Draft on "Employers' Accounting for Post-Retirement Benefits Other than Pensions." Mr. Jennings also relates that the FASB has recently issued SFAS 105, "Disclosure of Information About Financial Instruments with Concentrations of Credit Risks." The Auditing Standards Board has responded to SEC staff concerns on "going-concern" paragraphs in the "Omnibus Statement on Auditing Standards - 1990." The last issue that Mr. Jennings takes up is the prospect that Congress may act to require an auditor to inform the SEC of a dispute with a company concerning the failure of the company to take appropriate action after the auditor reports to the company the detection of possible illegal acts on the part of the company.

Current Developments in Financial Accounting and Reporting. Jennings, Dennis R., Fall/Winter 1990, pp. 1‑6.

In this Update Dr. Mark summarizes the first set of Proposed Regulations dealing with the economic performance criteria in Treasury Regulations S1.461-4T. The Revenue Service reiterated the notion that the all-events test must be satisfied before economic performance may be considered to have occurred. Dr. Mark also examines Proposed Reg. S1.1031(a)-2, relating to multi-asset and personal property-kind exchanges. These Proposed Regs. are likely to have a very significant influences on the oil and gas industry. Dr. Mark also discusses recent Letter Rulings dealing with the S29 credit for coal seam gas.

Current Update in Oil and Gas Taxation. Mark, Richard S., Fall/Winter 1990, pp. 7‑10.

Recently R.O. Beaverson resigned as Executive Director of the Council of Petroleum Accountants Societies and was replaced by J.W. Westbrook. Mr. Westbrook presents a summary of the activities of various COPAS standing committees.

COPAS: An Update. Westbrook, Jack W., Fall/Winter 1990, pp. 11‑16.

Mr. Haddock, President and Chief Executive Officer of American Petrofina Inc. discusses some of the most challenging and pressing problems and challenges facing the oil and gas industry in the next decade. These challenges include the changing supply/demand balance, environmental issues, the challenge of obtaining capital, energy taxes, and globalization of the industry. Mr. Haddock suggests ways that these challenges might be met, giving as examples some of the steps that have been taken by American Petrofina.

The Challenges of the 1990s. Haddock, Ron V., Fall/Winter 1990, pp. 17‑25.

The authors review recent tax developments at the state and local level. A major development is the Finnigan decision, involving unitary taxation in the State of California. In addition, pertinent tax developments in Texas, Louisiana, and Oklahoma are reviewed.

Recent State and Local Tax Developments Affecting the Petroleum Industry. Collis, Chris E.; Ryan, G. Brint; and Sharp, Tiffany L., Fall/Winter 1990, pp. 26‑32.

Mr. Spear, a research associate in the Institute of Petroleum Accounting, reports on the Institute's annual survey of reporting practices of 197 oil and gas companies. The survey covers the balance sheet, income statement, notes to the financial statements, and supplemental oil and gas disclosures. Ninety-four companies using the full cost method and 103 using the successful efforts method are included.

Financial Reporting Practices in the U.S. Petroleum Industry: Survey of 1989 Financial Reports. Spear, Nasser A., Fall/Winter 1990, pp. 33‑84.

Ms. Badgett presents demographic data about mineral and royalty owners in the United States. She points out the lack of readily available information about the nature of royalties and the rights and obligations of royalty owners. She also discusses the efforts of the National Association of Royalty Owners (NARO) to assist royalty owners.

A Profile of Mineral and Royalty Owners. Badgett, Mary, Fall/Winter 1990, pp. 85‑92.

In this report on a research project in the Institute of Petroleum Accounting, Mr. Cappel reviews the background and legal issues involved in removal and reclamation of offshore platforms. He then examines the accounting problem involved placing special emphasis on the difficulties in estimating future costs. Mr. Cappel also discusses the recommendations of the Oil Industry Committee in the United Kingdom. Finally, he makes a survey of the treatment and disclosure of reclamation costs in the annual reports of27 companies known to have offshore operations.

Accounting for Reclamation Costs. Cappel, James, Fall/Winter 1990, pp. 93‑126.

This report on a survey of companies who changed from full-cost accounting to the successful-efforts method, or from the latter to the former, suggests that a major reason that such changes were made was to enhance the appearance of the financial statements. Ms. Nichols also discusses the effects of changes on selected financial ratios.

Survey of Reasons for Accounting Method Changes. Nichols, Linda M., Fall/Winter 1990, pp. 127‑135.

Professor Grove has developed a decision model for analyzing the impact of using tax accounting methods, such as the Uniform Capitalization rules, for financial reporting purposes. In research funded by the Petroleum Accountants Society of Colorado, the model was applied to integrated oil companies to determine whether they chose UCR rules for financial accounting purposes in order to increase reported income. He concludes that this was not the case.

Impact of UCR upon Financial Accounting Methods for Petroleum Inventories. Grove, Hugh D., Fall/Winter 1990, pp. 136‑144.

Professors Purdue, Strickland, and Hemifar analyze the effects of announcements about the 1986 Tax Reform Act oil the returns (dividends plus market value changes) of 119 firms. They conclude that several announcement dates had significant impacts on industry returns.

Effects of the 1986 Tax Reform Act on Petroleum Industry Stock Returns. Perdue, D. Grady; Strickland, Thomas; and Homifar, Gliassen, Fall/Winter 1990, pp. 145‑158.

The lengthy process used by the Financial Accounting Standards Board which culminated in the issuance of FASB Statement No. 87, “Employers' Accounting for Pensions,' attracted an unusual number of responses from industry. The authors compare selected financial characteristics and the lobbying activities of corporations within the petroleum industry to those of other industrial firms in response to the issues raised in the discussion Memorandum on this topic.

An Empirical Analysis of Lobbying on Employers' Accounting for Pensions: The Petroleum Industry versus Other Industrial Corporations. Wilburii, Nancy L. and Kilpatrick, Bob G., Fall/Winter 1990, pp. 159‑178.