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IFRS 6 – Exploration and Evaluation for the Upstream Oil and Gas Sector

1 Day Training

Dates: Available on Request
Locations: Johannesburg, South Africa
Platform: Available In-Class / Online

Price: Available on request

Course Introduction

This IFRS 6 – Exploration and Evaluation for the Upstream Oil and Gas Sector course provides a detailed review of significant IFRS requirements for the upstream oil and gas sector, particularly how to recognise costs incurred in the exploration and evaluation phase. In addition, participants are provided with information to assist them in researching accounting issues and monitoring future changes.

 

This IFRS 6 – Exploration and Evaluation for the Upstream Oil and Gas Sector course looks in depth at accounting practices permitted by IFRS 6 within the exploration and development phase by reviewing these against benchmark treatments in US GAAP. In doing so it looks at the unique features posed by the upstream oil and gas industry.

 

This IFRS 6 – Exploration and Evaluation for the Upstream Oil and Gas Sector course is ideal for individuals with financial responsibilities who are new to the oil and gas industry or to accountants operating in the industry. It will review accounting requirements from pre-exploration to exploration and evaluation under the unique contractual arrangements common to this industry.

 

This IFRS 6 – Exploration and Evaluation for the Upstream Oil and Gas Sector course answers questions such as:

  • How to understand and apply IFRS to oil and gas exploration activities?

  • When to capitalise and when to expense under IFRS during exploration and how does the diversity in accounting practices in the extractive industry affect financial reporting?

  • When and how to assess unproved and proved properties for impairment?

  • What are the implications for the oil and gas industry of the IASB’s project on extractive industries and of other current IFRS developments?

Course Objectives

At the IFRS 6 – Exploration and Evaluation for the Upstream Oil and Gas Sector end of the training the delegates are expected to understand:

  • Apply IFRS to oil and gas exploration activities.

  • Judge when to capitalise and when to expense under IFRS during exploration.

  • When and how to assess unproved and proved properties for impairment.

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

Finance Courses

Training Methodology

Our diverse instructional approaches ensure effective learning:

– Lectures & Presentations: Engage with expert-driven, stimulating content.
– Course Material: Access well-crafted supporting resources.
– Group Work: Collaborate on discussions and case studies for practical insights.
– Workshops & Role-Play: Participate in immersive, scenario-based activities.
– Practical Application: Focus on applying theoretical knowledge in real situations.
– Post-Training Support: Receive extensive support after training for skill implementation.

Training Outline

  • 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.

  • 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

  • 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

Prerequisites

Knowledge of basic accounting under any national standards. No advance preparation is required for this course.

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