Accounting discussions in the petroleum industry over the summer of 2008 often centered around the SEC's proposed rule for modernization of the oil and gas reporting requirements, which was released on July 15, 2008. In FASB news, calendar-year companies were required to adopt SFAS 157 which codifies the meaning of fair value used in existing GAAP.

Current Developments in Financial Accounting and Reporting. McFarland, Megan, Summer 2008, pp. 1‑7.

The SEC wants U.S. registrants to make the transition to International Financial Reporting Standards (IFRS) by 2014. On August 27 of this year the SEC voted unanimously to establish a path that would eventually require U.S. companies to use international accounting standards instead of U.S. Generally Accepted Accounting Principles (GAAP) and has laid out “milestones” that must be achieved in order to go forward with the mandatory move to IFRS.

Current Developments in International Financial Reporting. Wright, Charlotte, Summer 2008, pp. 8‑11.

In response to a court mandate, the Texas Legislature in 2006 revised the Texas franchise tax to extend it to businesses that previously enjoyed liability protection without paying the tax. The revised franchise tax broadened the tax base but lowered the tax rate. Then in 2007, the Legislature fine-tuned the revised franchise tax with the passage of House Bill 3928. This article discusses some of the changes brought about by the revised Texas franchise tax.

The Revised Texas Franchise Tax. Stein, Eric, Summer 2008, pp. 12‑25.

The inherent complexity of petroleum accounting stems mainly from significant uncertainties involved in exploration, development, and production activities. Historically, most controversies in petroleum accounting concerned determining which exploration and development costs should be capitalized. This article gives an overview of the development of petroleum accounting regulations and discusses some of the difficulties facing regulators in trying to develop a more meaningful accounting framework for oil and gas upstream activities.

Oil and Gas Reserves Reporting Practices and Implications of SFAS 157. Kurdi, Ammr, Summer 2008, pp. 26‑45.

This article describes some of the legislative history and gives a primer on a number of the IRS's rulings for qualifying natural resources income of publicly traded partnerships under I.R.C. § 7704(d)(1)(E). Because the IRS relies heavily on non-standard definitions in the legislative history of this provision, care must be exercised in interpreting rules for qualifying natural resources income of publicly traded partnerships under this section.

Publicly Traded Partnership Qualifying Income from Natural Resources: Textualism Takes a Holiday. Swiech, Robert, Summer 2008, pp. 46‑60.

Much attention has recently been focused on fraud committed by business executives and—consequently—on the accounting firms that failed to detect the financial statement-related fraud. Transparency in financial accounting should serve as a deterrent to fraud and financial manipulation. However, the recent crisis in the financial markets has left many questioning the extent to which business managers are able to manipulate their financial accounting numbers and in doing so inflate their bonuses and mislead their investors and creditors. The purpose of this paper is to explore fraud-related accounting research to identify information which would be relevant to oil and gas accountants in developing procedures for fraud-risk assessment.

Assessing Fraud Risk: How Does the Oil and Gas Industry Stack Up? Skousen, Christopher and Wright, Charlotte, Summer 2008, pp. 61‑74.

First principles of both tax planning and economic arrangements for the joint development of oil and gas properties are based on risk sharing. The party that pays for the lease expects to bear the economic burden of depletion and worthlessness and to be allocated the tax deductions associated with these economic consequences. On the other hand, the party that pays for the cost of drilling the well expects to bear the economic risk of a dry hole and to deduct the intangible drilling and development costs. Each party expects the allocation of economic benefits and burdens agreed to in the joint operating agreement to be respected for tax purposes.

Why Are Tax Partnerships Used? Key, Jerry W., Summer 2008, pp. 75‑87.

The volume of mergers and acquisitions (M&A) activity has been increasing since 2004 and is now reaching record levels. The reasons for the record volume of global deal-making are various. Good economic growth in Asia, Europe, and North America coupled with record growth in China and India is certainly a factor. Relatively low interest rates, a low corporate default rate, strong stock market volumes, and record highs in money markets (U.S. and Asia) also played a part during this period.

Merger and Acquisition Integration Methodology. Van Der Weil, John and Cole, Deborah, Summer 2008, pp. 88‑99.

This study investigates auditor concentration in the energy industry in the Big Four era, a period also marked by enactment of the Sarbanes-Oxley Act of 2002 (SOX) which some have claimed has further reduced client choice. By examining the market for audit services in the light of these recent developments, insight into the relative competitiveness of current conditions may be gained.

An Analysis of Auditor Concentration in the Oil and Gas Industry. Wilson, Thomas, Summer 2008, pp. 100‑110.

You've just been handed a mineral lease by someone who represents an energy company, but you haven't a clue as to what most of the words mean. This article attempts to clear away a bit of the mystery and make a dent in understanding what really is in a lease.

What's in a Lease? You've Just been Handed One. Hoffman, Jim, Summer 2008, pp. 111‑116.