Course description
Join our comprehensive five-day IFRS workshop tailored for the upstream oil and gas industry. This detailed course covers significant IFRS requirements, regulatory reporting, and diverse accounting practices unique to this sector. Participants will engage with hands-on case studies, examples, exercises, and benefit from interactive sessions. Stay updated with the latest IFRS pronouncements and learn effective research methods for accounting issues and future changes.
Key Workshop Features:
- In-depth IFRS 6 Analysis: Explore accounting practices for the exploration and development phase, comparing IFRS with US GAAP benchmarks.
- Development and Production Phase Application: Understand IFRS application during these phases, focusing on joint venture operations and Production Sharing Agreements.
- Comprehensive Coverage: Learn about revenue, cost accounting, taxation arrangements, and conveyances.
- Best Practices in Management Reporting: Implement IFRS best practices for management reporting, including chart of accounts, operator reporting to partners, and key financial and reserves metrics.
This course is ideal for financial professionals new to the oil and gas industry or accountants within the sector. Gain knowledge on accounting requirements from pre-exploration to production for internal, external, and partner reporting under unique contractual arrangements.
Led by experienced instructors with extensive oil and gas and IFRS expertise, this workshop offers participants the advantage of decades of practical IFRS experience. The interactive workshop format allows for personalized Q&A sessions, ensuring thorough understanding. Our specialists simplify complex principles with real-world examples.
Upcoming start dates
1 start date available
Suitability - Who should attend?
- Financial accountants in the oil and gas industry
- Management accountants of IOC’s and NOC’s
- Internal and external auditors of oil and gas companies reporting under IFRS
- Staff of revenue authorities and NOC’s working with IOC’s
Outcome / Qualification etc.
At the end of this course, the participant will be able to
- Apply IFRS to oil and gas exploration, development and production activities
- Judge when to capitalise and when to expense under IFRS during exploration and development
- Identify the differences in treatment between accounts prepared under IFRS and those prepared under PSAs
- Evaluate the impact of using different units of production methods to calculate DD&A
- Describe the principal assumptions needed to conduct impairment reviews and to establish decommissioning provisions under IFRS
- When and how to assess unproved and proved properties for impairment
- Calculate and interpret financial and operational metrics used to analyse costs, profitability, efficiency, and value added by a firm's exploration and production activities
- Prepare cash call requests, joint billing statements and cut back entries
- Develop the key components of an oil and gas chart of accounts
- Evaluate the impact of acquisitions, disposals and exchanges of oil and gas properties on the financial statements
Training Course Content
- Fundamental Concepts of Oil and Gas Accounting Methods
- Characteristic Features of the Oil and Gas Industry
- Scale of operations
- Nature and timing of cash flows
- Risks
- IFRS fundamentals
- The conceptual framework
- Selection of accounting policies (IAS 8)
- Overview of successful efforts vs. full cost methods
- Concepts of oil and gas accounting
- Life cycle if operations
- Interaction between IFRS and national oil and gas reporting practices as developed by the USA and other countries
- Presentation of financial statements by IFRS reporters
- Application of IAS 1 Presentation, and IAS 7 Statement of cash flows and IFRS 8 Operating segments
- Influence on presentation of past practices and regulatory listing requirements
- Introduction to reporting of oil and gas operations, properties and reserves
- Accounting for exploration and evaluation
- IFRS definitions of tangible and intangible assets (IAS 16 and IAS 38) and scope exclusions
- Accounting for pre-exploration expenditures
- Review of purpose and nature of IFRS 6
- Full cost methods of accounting during the exploration and evaluation stage, comparing US GAAP treatments to those permitted under IFRS 6
- Successful efforts methods during exploration and evaluation, comparing US GAAP treatments to those permitted under IFRS 6
- Treatment of non-drilling exploration activities, dry holes, appraisal activities, impairment reviews of unproved property and upon completion of evaluation
- Comparison of benchmark methods to other treatments found under IFRS
- Accounting for development
- Distinguishing between development activities and exploration or production activities
- Treatment of dry holes and unanticipated expenditures
- Application of impairment methods under IAS 36
- Application of IAS 38 and IAS 16 to development phase activities
- Borrowing costs
- Application of IAS 23, capitalization of borrowing costs to exploration and development
- When to commence and cease capitalization
- What rate to use
- Retirement obligations / decommissioning
- Review of provision principles in IAS 37
- Application to environmental damage
- Application to asset retirement obligations, when to commence recognition, how to estimate the liability, what discount rate to use, how to account for changes in estimates
- Accounting for rehabilitation funds (IFRIC 5)
- Production
- Stores and warehouse inventory
- Workovers and recompletions
- Methods of depreciation, depletion, and amortization; defining the cost centre, which reserves to use, how to adjust the numerator, shared production, depreciating common facilities
- Asset impairment during the production phase
- Revenue recognition
- Revenue recognition under IFRS 15
- Application to recognition (production, lifting, production inventory (IAS 2))
- Reporting of reserves
- Supplementary disclosure requirements relating to oil and gas producing activities required by SEC and other regulators including COGEH
- Best practices from other IFRS reporters
- SEC Oil & Gas Modernization Act
- Where to find key data relating to firms' exploration and production activities
- Proved oil and gas reserve quantities
- Costs incurred for property acquisition, exploration & development activities
- The standardized measure of discounted future net cash flows ('PV10')
- Update on the IASB's project for Extractive Industries Financial Reporting
- Performance metrics
- Review of typical metrics used by analysts (internal and external)
- Computation of metrics using published property, reserves and operational information
- Taxation of oil and gas
- Typical tax regimes
- Distinguishing between revenue bases taxes and income based taxes
- Accounting for and presentation of revenue based taxes
- Accounting for taxation under IAS 12, including super taxes
- Application of IAS 12 to oil and gas assets and decommissioning liabilities
- Joint operations and joint ventures
- Reasons for joint arrangements in the industry
- Nature of joint venture and joint operations
- Accounting for contributions by the venturers
- Under and over lift and methods of diverse methods of accounting for it
- Identification of joint ventures (entities) and accounting for them under IAS 28 in the economic entity and separate financial statements
- Production sharing agreements (PSA/PSC)
- What are PSA’s and where are they found?
- What are the typical provisions within a PSA
- Running the economics of a PSA, impact on reserves, production
- Cost oil and profit oil and revenue share
- Pre and post-tax arrangements including tax barrels and pay on behalf of regimes
- Understanding the differences between IFRS treatments and PSA treatments of capex, opex, recoverable and unrecoverable costs
- IFRS treatment of oil and gas assets, reporting of reserves and calculating DDA in PSAs
- Comparison with treatments under other contractual arrangements (risk sharing and technical service agreements)
- Accounting for acquisitions, asset exchanges and conveyances
- Typical types of acquisition, exchange and conveyances within the industry
- Identification of asset acquisitions from business combinations (application of IFRS 3) and impact upon accounting
- Recognition and measurement of goodwill arising from business combinations
- Asset exchanges in the exploration phase, relevance of US GAAP treatments in an IFRS environment
- Treatments of pooling of interests, unitizations and farm-in, farm-out arrangements, comparing US GAAP treatments to treatments emerging under IFRS
- Asset exchanges involving cash consideration and partial and full disposals of properties
Course delivery details
- Group live instruction in an interactive workshop format, using cases, examples, group work, open discussions etc.
- Review of the rationale, objective and scope of IFRS as applied by oil and gas
- Description and explanation of IFRS and joint venture requirements in clear and simple language
- Use of case studies and real-world examples to illustrate practical application of the standards
- Interactive participation will be encouraged
- At VantagePoint, we have a policy to avoid unnecessary printing. All course materials will be provided in soft copy. The only printed materials will be those necessary for exercises in class.
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VantagePoint Training
12 Moorgate
EC2R 6DA London
VantagePoint Training
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