The Emerging Issues Task Force (EITF) of the FASB considered accounting for gas balancing arrangements. The FASB issued SFAS No. 106 on employers' accounting for post-retirement benefits other than pensions. SEC concerns include: oil and gas prices in SEAS NO.69 disclosures; environmental costs and liabilities in SFAS No. 5 disclosures; combined historical financial statements of all limited Partnerships involved in a roll up; goodwill in the acquisition of an oil and gas exploration and production company; the definition of proved reserves to be recovered by Improved recovery techniques; and the successful efforts ceiling test. The AICPA Accounting Standards Executive Committee addressed financial reporting by entities in reorganization under the Bankruptcy Code.

Current Developments in Financial Accounting and Reporting. Jennings, Dennis R., Spring 1991, pp. 1‑7.

Recent cases and revenue rulings are reviewed on several topics: the special allocation of IDC's; depletion of bases including the remaining adjusted basis in depreciable assets under the alternative minimum tax (AMT); trust distributions as completed gifts; costs depletion on inherited oil inherent in a community property state; gross income for percentage depiction; retailer/refiner status; royalty payments as Passive or portfolio income; aggregation under Section 465; line pack; corporate distribution of bonus and delay rentals; abandonment losses; and non-conventional fuels tax credit issues.

Current Update in Oil and Gas Taxation. Mark, Richard S., Spring 1991, pp. 8‑15.

The COPAS Fall Meeting saw the approval of Revised Bulletin 21--Material Pricing Manual. Approved also was the Employee Benefit Limitation Percentage for 1991. Directors and officers were elected. The activities of the standing committees are reviewed.

COPAS: An Update. Westbrook, J. W., Spring 1991, pp. 16‑21.

With this issue of the Journal, we resume the Accounting Forum, 3 column which provides readers an opportunity to raise questions about accounting and reporting practices that may be of interest to other readers. Three topics are examined: chemicals used in tertiary injection projects; using the revenue basis for amortizing costs; and accounting for tubular goods in field inventory.

Accounting Forum. Brock, Horace, Spring 1991, pp. 22‑26.

An unusual aspect of federal leases is the power of the Department of the Interior (DOI) to establish royalty values and make retroactive value determinations. Audit issues include the time period available to the government for the determination of royalties. A problem for both state and federal leases is determining on what production royalty is owed. Also discussed are problems related to entitlements, take-or-pay payments, advance payments, contract buy-downs and buy-outs, reimbursements for production-related costs, tax reimbursements, gas processing rights and imputed proceeds, and valuation issues in non-arm's-length transactions.

Royalty Issues under Federal and State Mineral Losses. Price, Deborah Bahn, Spring 1991, pp. 27‑48.

Market-oriented transactions have replaced long-term contracts with contracts that resemble retail agreements involving purchase orders and flexible pricing. Purchasers are no longer primarily pipelines. As a result of major regulation changes, pipelines now transport more gas owned by others than gas held for resale by the pipeline. Gas produced and available for sale or purchase can no longer be totally equated to the actual sale or purchase of natural gas. Spot sales and open access transactions introduce a new variable--volume imbalances. The article discusses nomination; confirmation; volume measurement; volume allocation using pro rata, swing, balancing, and entitlement methods; and invoicing. The types of volume imbalances and the roles of different Industry participants is examined.

Volume Imbalances. McClure, Don R., Spring 1991, pp. 49‑74.

Electronic Data Interchange (EDI) is the computer-to-computer exchange of business documents in a standard format. The various organizations and committees involved in setting those standards both within and outside the oil and gas industry are discussed. A listing is provided of current applications within the oil and gas industry including the names of persons who may be contacted about the application.

Current Standards and Applications of Electronic Data Interchange (EDI) in the Petroleum Industry. Robertson, Jr.; K. G., Spring 1991, pp. 75‑84.

The article discusses the key energy incentives posted last fall. Percentage depletion is made more available by increasing the income limit to 100 percent and by eliminating the transfer prohibition. The percentage depletion rare allowed on marginal production is increased potentially. A tax credit is authorized for enhanced oil recovery (EOR). An alternative minimum tax (AMT) energy preference deduction is provided for independent producers. Section 29 credits are extended on non conventional fuels and definitions are modified to make re-working older properties more profitable.

Energy Tax Incentives of the Revenue Reconciliation Act of 1990. Searight, William H., Spring 1991, pp. 85‑90.

Catastrophic oil tanker spills have made headlines over the past few years. One study reported that, of 78 spills resulting from the ships' grounding, colliding, or ramming, 35 were at least indirectly due to the crews operation of the vessel. This paper discusses employment contracts currently used to remunerate ship captains and then applies the analytical results of agency theory research to develop employment arrangements that could reduce the likelihood of an oil spill.

The Use of Employment Contracts for Reducing the Likelihood of Tanker Spills in the Oil and Gas Industry. Newman, Harry A. and Wright, David W., Spring 1991, pp. 91‑104.

The Securities and Exchange Commission (SEC) has recently issued an interpretive release on various required disclosures for Management Discussion and Analysis of Financial Condition and Results of Operations (MDA). Over 96% of the reviewed companies received comment letters indicating problems in MDA disclosures. The extractive industries were nor specifically mentioned. In this article, 30 energy companies are reviewed. Two particular MDA problems were common: inadequate analytical framework in the results of operations section and no analytical framework in the liquidity and capital resources section. The article offers operational guidelines to correct these problems.

Operational Guidelines for SEC Release concerning MDA Disclosures. Rizzuto, Run and Grove, Hugh D., Spring 1991, pp. 105‑117.