Question

Write and explain the accounting policies used by Ghana Gas Company in its financial statements preparation

Answer 1

By the end of the IFRS for the Oil and Gas Industry training course, delegates will learn how to:

Develop an understanding of the accounting standards, policies and practices used by companies in the Oil & Gas Exploration & Production industry
Appreciate the nature and financial implications of Production Sharing Contracts and other agreements between host governments and international companies
Examine issues and guidelines in accounting for Joint Ventures
Identify and know how to apply international and national accounting standards most relevant to the E&P industry
Improve relevance and reliability of financial reports to better meet the needs of users
Review and use publicly available information for benchmarking the business performance of companies in the E&P industry

Content

The Oil and Gas Sector & Major Accounting Issues
The Oil & Gas Sector & the Macro-economic Factors
Commodity prices, currency fluctuations, interest rate risk and political developments and environmental risk.
Costs in Acquisition, Exploration, Development and Production of new oil or natural gas reserves
Accounting Approaches
The "Successful Efforts" (SE) Method or the "Full Cost" (FC) Method
Introduction/Overview of IFRS in relation to the Oil & Gas Sector, with particular reference to:
IFRS 1: First-time Adoption of International Financial Reporting Standards
IFRS 6: Exploration for and Evaluation of Mineral Assets
IFRS 10: Consolidated Financial Statements
IFRS 11: Joint Arrangements
IAS 16: Property, Plant and Equipment
IAS 36: Impairment of Assets
IAS 37: Provisions, Contingent Liabilities and Contingent Assets
IAS 38: Intangible Assets
IAS 39 Financial Instruments: Recognition and Measurement – Superseded by IFRS 9 – was to be effective 2013 but now 2018

Evaluating the Performance and Identifying the Accounting Issues
Analysis of financial statements
Income Statements
Statement of Financial Position (Balance Sheet)
Cash flow Statements
Identification & Evaluation of their Accounting Policies
DuPont Analysis – Evaluating and Improving Return on Equity (ROE)
Evaluation of their Share Price and Investment Performance
Case Study: BP, Chevron, Shell and SABIC
Accounting for Upstream Activities with reference to IFRS
Reserves and resources
Exploration and evaluation
Revenue recognition
Assets
Depletion, Depreciation & Amortisation (“DD&A”)
Impairment of development, production and downstream assets
Examples: BP, Chevron & Shell
Joint Arrangements, Financial Instruments and Derivatives
Business Combinations, Joint Ventures & Production Sharing Agreements (“PSA”s)
Treasury Management Issues for Multi-nationals
The Use of Derivatives in the Oil& Gas Sector to manage the commodity, currency and interest-rate risks etc.
British Airways Case Study – Hedging the Oil Price using Futures
Creative Accounting and Corporate Governance
Creative Accounting – Enron and investor protection
Leases – IFRS 16 (new standard)
Auditors and reporting to investors in the oil and gas industry
External audit investigations and reports
The Auditor’s ‘Opinion'
True and Fair
Sarbanes Oxley
Internal audits
Ethical issues
Corporate governance
Government regulation
Investor confidence and share prices

For whom: Accountants, Auditors, Human Resources Managers, Directors, Treasurers, Lawyers, and others who perform related functions in the Oil and Gas Industry.

Training Methodology   

The training methodology combines lectures, discussions, group exercises and illustrations. Participants will gain both theoretical and practical knowledge of the topics. The emphasis is on the practical application of the topics and as a result participant will go back to the workplace with both the ability and the confidence to apply the techniques learned to their duties.