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

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

Master IFRS 6 Cost Recognition, Impairment, and Disclosure for Upstream Oil and Gas

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Platform:
Online
In-class
Date Venue Duration
11 November 2026 Live/Online 1 Day

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. 

Prospen Africa’s 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 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 reviews accounting requirements from pre-exploration to exploration and evaluation under the unique contractual arrangements common to this industry. 

This 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 concluded project on extractive activities, and of other current IFRS developments, including sustainability-related disclosure requirements? 

Course Objectives

At the end of the IFRS 6 – Exploration and Evaluation for the Upstream Oil and Gas Sector training, 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
  • Determine when and how to assess unproved and proved properties for impairment
  • Understand the outcome of the IASB's concluded Extractive Activities project and its practical implications for IFRS 6 reporting going forward
  • Recognise the growing relevance of sustainability-related disclosure (IFRS S1/S2) alongside traditional E&E financial reporting

Who should attend?

  • Financial Accountants in the Oil and Gas Industry
  • Management Accountants of IOCs and NOCs
  • Internal and External Auditors of Oil and Gas Companies Reporting Under IFRS
  • Staff of Revenue Authorities and NOCs Working with IOCs
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

Day 1: Fundamental Concepts and Accounting for Exploration and Evaluation
Module 1: 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 and the conceptual framework
  • Selection of accounting policies (IAS 8)
  • Overview of successful efforts vs. full cost methods
  • Concepts of oil and gas accounting, and the life cycle of operations
  • Interaction between IFRS and national oil and gas reporting practices, as developed by the USA and other countries
Module 2: 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 the 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
Day 2: Impairment, Disclosure, and Current Developments
Module 3: Impairment and Treatment of Specific Activities
  • Treatment of non-drilling exploration activities, dry holes, and appraisal activities
  • Impairment reviews of unproved property and upon completion of evaluation
  • Comparison of benchmark methods to other treatments found under IFRS
Module 4: Reporting of Reserves and Regulatory Disclosure
  • Supplementary disclosure requirements relating to oil and gas producing activities required by the SEC and other regulators, including COGEH
  • Best practices from other IFRS reporters
  • The 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, and the standardised measure of discounted future net cash flows (‘PV10’)
Module 5: Current Developments in Extractive Industries Financial Reporting
  • The IASB's Extractive Activities project: concluded at the Board's September 2023 meeting, with the decision to retain IFRS 6 in its current form rather than replace it — diverse accounting policies for exploration and evaluation expenditure will therefore continue to be permitted in practice
  • The growing relevance of sustainability-related disclosure (IFRS S1 General Requirements and IFRS S2 Climate-related Disclosures) alongside traditional E&E financial reporting
Prerequisites
  • Knowledge of basic accounting under any national standards. No advance preparation is required for this course.

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

Master exploration expenditure accounting, impairment testing procedures, asset reclassification rules, and regulatory disclosure mandates to ensure compliant financial reporting under IFRS 6 in the upstream energy sector.

What topics are covered in the IFRS 6 Upstream Oil and Gas course?
The course covers initial recognition and measurement of exploration and evaluation (E&E) assets, successful efforts vs. full cost accounting, impairment testing triggers under IFRS 6, technical feasibility and commercial viability assessment, asset reclassification upon commercial discovery, and site restoration/decommissioning provisions (IAS 37).
Who should attend this IFRS 6 oil and gas accounting training?
This masterclass is designed for financial controllers, upstream accountants, joint venture finance leads, audit managers, petroleum economists, and financial officers operating within exploration, production, and energy companies.
What are the key learning objectives of this IFRS 6 masterclass?
Delegates learn to formulate compliant accounting policies for upstream exploration costs, establish cash-generating units (CGUs) for E&E impairment testing, handle farm-in and farm-out accounting arrangements, and prepare transparent financial disclosures for energy sector reporting.
How long is the IFRS 6 Upstream Oil and Gas training course?
The programme is delivered as an intensive 5-day specialized workshop featuring practical exploration balance sheet workouts, joint venture auditing case studies, and E&E asset impairment simulation clinics.
What practical skills will delegates gain from this masterclass?
Participants will gain hands-on skills in mapping capitalizable vs. expensed exploration expenditure, calculating decommissioning liabilities, evaluating impairment indicators specific to oil and gas licenses, and transitioning E&E assets to development assets (IAS 16 / IAS 38).
Can Prospen Africa deliver this course as customized in-house training?
Yes. Prospen Africa can tailor the course to reflect your company’s specific upstream asset portfolio, local licensing agreements, Joint Operating Agreement (JOA) accounting guidelines, and corporate reporting policies.

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