Companies in the extractive industry operate in an environment that is increasingly dynamic, unstable, and complex. This paper assesses the characteristics and risks that the surrounding environment of the industry poses to the accounting policy issues faced by the industry.

Factors and Forces of the Extractive Industry Environment and Their Implications for Accounting Measurement and Financial Reporting. Spear, Nasser and Wise, Trevor, Fall/Winter 2002, pp. 1‑27.

The issuance of Financial Reporting Standard No. 12 (FRS 12) Provisions, Contingent Liabilities and Contingent Assets presents an opportunity to explore the relationship between share prices and the adoption of new accounting regulations, since the impact of FRS 12 on corporate financial statements of oil and gas firms could be quite dramatic

An Investigation of the Impact of the Issuance of FRS 12 Provisions, Contingent Liabilities and Contingent Assets on the Share Prices of UK Oil and Gas Companies. Jetty, Juliana and Russell, Alex, Fall/Winter 2002, pp. 28‑52.

In June of 2001 the Financial Accounting Standards Board (FASB) issued two new accounting standards—Statements of Financial Accounting Standards (SFAS) No. 141, "Business Combinations," (FASB 2001) and SFAS No. 142, "Goodwill and Other Intangible Assets" (FASB 2001)—and dramatically changed accounting for business combinations. These new accounting standards will impact accounting for goodwill, and the impact will be greatest for those firms with substantial amounts of goodwill on their books.

SFAS 141 and 142: Relevance to Prior and Future Mergers and Acquisitions in the Oil, Gas, and Energy Industry. Schneider, Douglas; McCarthy, Mark; and Christian, Cal, Fall/Winter 2002, pp. 53‑62.

Calculation of royalty due under an oil and gas lease depends first and foremost on the language in the lease, and courts in different states sometimes reach different conclusions even when faced with the same facts and the same lease language. Until the oil and gas industry elects to address the lack of specificity in royalty clauses, the uncertainties will continue, with the resultant costs of litigation inherent in these general royalty clauses, and with the sometimes radically different results reached by courts in different jurisdictions who are forced to make decisions without any lease language to guide them.

Issues concerning Royalty Valuation and Deductions. McFarland, John, Fall/Winter 2002, pp. 63‑86.

In recent years, there has been a strong growth in fees for non-audit services relative to audit services in the fee structure for external auditors. The dramatic increase in the proportion of non-audit service revenues has raised concern about the loss of auditor independence resulting from the greater economic reliance of external auditors on their clients. This article examines the relationship between audit and non-audit fees for oil and gas firms.

The Provision for Non-Audit Services and the Low-Balling of Audit Fees for Firms in the Oil and Gas Industry. Mitra, Santanu; Crumbley, Larry; Deis, Donald; and Reynolds, Kenny, Fall/Winter 2002, pp. 87‑109.

Faced with uncertain economic conditions which could result in either a substantial oversupply of oil (or a sudden shortfall), many owners of producing properties see this as the right time to sell. Against that economic backdrop, a brief discussion of tax rules related to the sale of mineral interests merits consideration. This article explores those rules, focusing specifically on the proper reporting of taxable income between the effective date and the closing date of a sale transaction.

Proper Reporting of Income Earned between Effective Date and Closing Date of Purchasing Agreement. Bryson, Vance C., Fall/Winter 2002, pp. 110‑119.

Proved reserve estimates—the heart and soul of US reserve disclosures—are by design conservative. Yet companies make huge investment decisions based on something other than proved reserves. How much are reserves in the ground worth?

Value of Reserves in the Ground. Johnston, Daniel, Fall/Winter 2002, pp. 120‑132.

The past few years have witnessed the rise and fall of many technically advanced—but struggling—young companies, originally touted as having revolutionary offerings for the oil and gas industry. By examining some of the premises and principles on which energy oriented tech companies such as business-to-business exchanges and back office software companies are founded, we may gain some insight into why some succeed and many subsequently fail.

Technical Start-Ups in E&P: Yesterday and Today. Hoffman, Jim, Fall/Winter 2002, pp. 133‑139.

The issuance in June 2001 of SFAS No. 143, "Accounting for Asset Retirement Obligations" (concerning legally enforceable obligations associated with the retirement of tangible long-lived assets) will result in a significant accounting change for many affected companies—particularly companies in the oil and gas industries.

Current Developments in Environmental Issues. Wright, Charlotte, Fall/Winter 2002, pp. 140‑144.

A report on the recent board meeting in Las Vegas and an update of the activities of the various committees and subcommittees of the Council of Petroleum Accountants Societies.

COPAS: An Update. Gear, Jon, Fall/Winter 2002, pp. 145‑150.