Dublin, April 21, 2023 (GLOBE NEWSWIRE) -- The "mastering ifrs for oil and gas" conference has been added to ResearchAndMarkets.com's offering.

This four-day course focuses on the financial reporting issues currently faced by the oil and gas industry, including accounting for joint arrangements and production sharing agreements.

It considers which International Financial Reporting Standards(IFRS) are of specific relevance to the industry and how they are applied by the industry to its transactions, balances and contracting arrangements.

While much of the course focus will be on upstream activities, it also considers many issues that will be of relevance to downstream operations. It considers which costs should be capitalised, how they should be amortised and impaired, production expenses, recognition of revenue and treatment of joint arrangements.

Alan has led numerous accounting courses around the world with participation of almost all the leading organisations in oil & gas industry such as Shell, BP, Eni, RWE Dea, OMV, Saudi Aramco, Dubai Supply Authority, Oman Gas, DNOYemen, NAMCOR, Al- Khafji Joint Operations, Dragon Oil, GAPCO Kenya, NAPIMS - NNPC, TPDC, Pertamina, Department Of Energy Philippines, RAK Petroleum, PTTEP, PetroChina, Petrobras, Tullow Oil, NAPESCO Gazprom and TPDC etc.

Why You Should Attend

Accountants and analysts in oil and gas sector face unique challenges. There are complex contractual arrangements, multiple financial reporting requirements and volatility in output and prices has triggered requirements for impairment reviews.

Adding to that, with the lack of clear guidance provided by IFRS and constant changes to the Standards, it is little surprise that this sector finds accounting for its transactions so difficult.

This course is intended to provide an in-depth look at the accounting for these unique arrangements and help you and your team put them into practice effectively, and keep up to date with latest developments in IFRS.

Specific areas treated include:

• Accounting for exploration activities and application of IFRS 6
• Accounting for development and production activities
• The importance of hydrocarbon reserves definitions on accounting estimates
• The challenges posed by impairment reviews
• Accounting for decommissioning obligations
• Accounting for joint arrangements by investors and the operator
• Accounting for and cost recovery of production-sharing contracts

This course is kept up to date with developments in best practices and evolution of accounting standards, and will consider the impact of IFRS 15 revenue and IFRS 16 leasing, and update on the IASB's plans relating to upstream activity accounting.

Who Should Attend:

The course will be of benefit to all finance and accounting professionals who require an understanding of oil and gas accounting procedures including those involved in the preparation, audit or analysis of oil and gas accounts and needing to keep up to date with latest developments.

It will particularly benefit staff who are taking on increased financial responsibilities including: Chief Accountants, Financial Accountants, Accounting Clerks, JV and Joint Operating Agreement Accountants, Internal and External Auditors, Financial Analysts from financiers and regulators etc. Participants shall have a fair working knowledge of general accounting principles and practise.

Agenda:

Day 1

Fundamental Concepts of Oil and Gas Accounting Methods

• Financial reporting frameworks (IFRS vs. US GAAP)
• The impact of differing contractual arrangements
• Discussion of key accounting principles for transactions
• The importance of IAS 8, Selection of Accounting Policies and the IFRS Conceptual Framework
• Case study: Introductory walkthrough of typical upstream transactions from prospecting to production to view their impact on the financial statements. Comparison of walkthrough results with the real report of an independent exploration company

Accounting for Assets Under IFRS

• The treatment of drilling and non-drilling exploration costs under:
  • Main recognition and measurement principles of IAS 16 (Property, Plant and Equipment) and IAS 38 (Intangible Assets)
  • Depreciable life and the principles of amortisation and depreciation and impairment
• Case study: Application of IAS 16 and IAS 38 to the construction of a facility
• Introduction to Accounting for Exploration Activities
  • How different treatments of capitalization vs. expense affect financial statements
  • How different accounting principles have developed under GAAP and IFRS and the influence GAAP has had on IFRS
  • Rules governing exploratory expenditures and the principles of IFRS 6, Exploration for and Evaluation of Mineral Resources

Specific Exploration Accounting Treatments

• The treatment of drilling and non-drilling exploration costs under:
  • Successful efforts methods, comparing IFRS with US GAAP
  • Full cost capitalization method
  • Update on the IASB's project to reconsider IFRS 6
• Case study: Comparing and contrasting the accounting for acquisition of property rights, drilling expenses, non-drilling expenses and dry holes under both successful efforts and full cost methods

Day 2

Use of Leased Assets

• Use of leased assets by the industry
• Review of accounting by lessees under IFRS 16
• Case study: Identifying and accounting for leased assets used during exploration

Principles of Asset Impairment

• Discussion of what impairment is, what triggers it and its impact economically and on the financial statements
• Principles of impairment under IAS 36
• Modifications to IAS 36 specified by IFRS 6
• Application of impairment to assets in the exploration phase
  • Successful efforts
  • Full cost capitalization
• Case study: Identifying and accounting for impairment of oil and gas properties in the exploration phase

Proved Oil and Gas Reserve Quantities

• Importance of the SEC Oil & Gas Modernization Act to upstream accounting and disclosure for investors
• Reserves definitions and their relevance to IFRS reporting entities

Accounting in the Development Phase

• Requirements of IFRS 6 relating to the reclassification of exploration assets into development assets
• Review of key principles from IAS 38 Intangible Assets and IAS 16 Property Plant and Equipment and their application to drilling and non-drilling expenditures in the development phase
• Application of IAS 36 Impairment during development
• Case study: Contrasting treatments of development expenditures between successful efforts and full cost

Decommissioning Obligations

• Application of IAS 37 and IAS 16 to the treatment of decommissioning obligations
• Issues posed by rehabilitation funds
• Case study: Illustrating the creation of the decommissioning obligation, its run off over time and changes to estimates

Day 3

Borrowing Costs Capitalization

• General treatment of accounting for interest expense and when it is capitalised under IAS 23
• Borrowing costs to be capitalized into development assets
• Case study: Calculate capitalised interest and show its accounting treatment

Production Costs, Depreciation, Depletion and Amortization

• Nature of expenditures incurred
• General accounting treatments for production expenditures
• Case study: Determine the appropriate accounting treatments for workovers and recompletions
• Application of units of production method
• Case study: Estimate the depreciation for a field with both proved developed and proved undeveloped reserves

Revenue Recognition, Measurement and Allocation

• Review of IFRS 15; its 5-step approach to revenue recognition
• Measurement of oil and gas revenues
• Accounting for imbalances; differences in permitted treatments
• Treatment of royalties and sales taxes
• Case study: Accounting for oil and gas imbalances

Day 4

Joint Arrangements

• Nature of joint arrangements (ventures)
• Typical contents of the joint operating agreement
• Review of IFRS 11 and IAS 28 accounting for joint arrangements by the investor
• Accounting procedures by the operator
• Case study: Calculate, prepare and book cash calls, joint interest billing statements and cut-back entries

Production Sharing Contracts

• What, where and why of PSC
• Cost recovery mechanisms (cost oil)
• Profit sharing mechanism (profit oil) and taxes
• Different accounting treatments between financial statements and recoverable costs
• Accounting for carried operations
• Running reserves under a PSC
• Typical causes of dispute
• Overview of the new Indonesian gross recovery agreements
• Case study: Determine cost and profit oil split between IOC, NOC and State

Wrap Up of the 4-day Workshop

Speakers:
Alan Mayo
Maltway
Alan Mayo FCA is a chartered accountant from the UK and a member of the Institute of Internal Auditors with 30 years' professional experience.
Alan began his career with PwC where he spent 10 years conducting and managing external audits in the private sector. He then spent a further 10 years as a consultant with PwC leading training programs supporting major systems and process change, predominantly in the public sector.
On leaving PwC Alan formed his own training business which he has been running for the past 15 years. During that time he has worked on a wide range of financial training projects within the private, public and not-for-profit sectors.
Alan has conducted training courses worldwide covering aspects of risk management, internal control, operational and financial control, countering risk of fraud, financial reporting and audit for numerous organisations including Shell and Government Agencies such as London Boroughs of Lambeth and Ealing Council etc.
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