Petroleum Accounting and Financial Management Journal

Spring 2008 Vol. 27 № 1
Current Developments in Financial Accounting and Reporting Impacting the Exploration and Production Industry 1
Megan McFarland

This article covers recent pronouncements and interpretations from the Financial Accounting Standards Board including the January 15, 2008 release of the long-awaited FASB Accounting Standards Codification for a one-year verification period. Pronouncements and interpretations issued by the FASB include FAS 157 (fair value measurements); FAS 141(R), Business Combinations; FAS 160, Non-controlling Interests in Consolidated Financial Statements; and FAS 161, Disclosures About Derivative Instruments and Hedging Activities, an amendment to FAS 133. The SEC has had several releases, including new disclosure rules for smaller companies, a proposal to defer the section 404 attest requirement for smaller public companies and various clarifications and recommendations for improving fair value disclosures in MD&A, all of which are applicable to many industries. Specific to oil and gas, the SEC is beginning to talk about reserve definitions again.

Current Developments in Financial Accounting and Reporting Impacting the Exploration and Production Industry. McFarland, Megan, Spring 2008, pp. 1‑7.

Current Developments: International Financial Reporting 8
Charlotte Wright

The International Accounting Standards Board (IASB) is seeking to develop an accounting and disclosure model targeted at issues unique to upstream oil and gas production as well as other extractive activities. The goal of this project is to develop an International Financial Reporting Standard (IFRS) on accounting for extractive activities. This article discusses the activities aimed at achieving this goal.

Current Developments: International Financial Reporting. Wright, Charlotte, Spring 2008, pp. 8‑10.

2008 Legislative and Regulatory Update: A State-by-State Guide 11
Bob Wilkinson

This article provides an state-by-state overview of recently enacted changes in legislative and regulatory law pertaining to oil and gas taxation at the state level.

2008 Legislative and Regulatory Update: A State-by-State Guide. Wilkinson, Bob, Spring 2008, pp. 11‑15.

State of Texas Margin Tax Compliance Issues for the Oil and Gas Industry 16
Robert Pulliam

This article addresses the unique aspects of the margin tax as it applies to the oil and gas industry. Some of the topics covered include general and limited partnerships, estates and trusts, affiliated groups, S and C corporations, and unitary business classifications.

State of Texas Margin Tax Compliance Issues for the Oil and Gas Industry. Pulliam, Robert, Spring 2008, pp. 16‑31.

Russia—Tough Investment Environment 32
Daniel Johnston

Numerous debates are underway world-wide over the relationships between international oil companies and governments. This article relates the saga of the Sakhalin II project, an offshore oil and gas field development in the Sea of Okhotsk off the eastern shore of Sakhalin Island, Russia, and one of the earliest of the Russian production sharing agreements. Ultimately the relationship deteriorated. This is because most of the political pressures brought to bear on this project resulting in a virtual takeover by Gazprom were based on false logic. This problem is not unique to the Sakhalin II situation. Indeed, the Sakhalin II project embodies many of the key issues of the day in the former Soviet Union (FSU).

Russia—Tough Investment Environment. Johnston, Daniel, Spring 2008, pp. 32‑46.

An Empirical Examination of Income Smoothing Intentions in Extractive Industry Firms 47
Ayodele Oshokamere Asekomeh, Alex Russell, and Heather Tarbert

The standard setting bodies face ethical questions about the nature of empirical evidence when they consider assertions made by respondents against or in favor of a proposed standard. This study explores whether respondent firms to the International Accounting Standards Committee's extractive industries issues paper (issued for comment in November 2000) possess characteristics likely to induce managerial intent to smooth income and if these possibly influenced the pattern of their responses.

An Empirical Examination of Income Smoothing Intentions in Extractive Industry Firms. Asekomeh, Ayodele Oshokamere; Russell, Alex; and Tarbert, Heather, Spring 2008, pp. 47‑68.