Financial reporting in the oil and gas industry

International Financial Reporting Standards (IFRS) provide the basis for financial reporting to the capital markets in an increasing number of countries around the world. Over 100 countries either use or are adopting IFRS.

 Those companies already on IFRS have their own challenges as the pace of standard- setting from the International Accounting Standards Board (IASB) has been intense in recent years with a constant flow of changes for companies to keep up with.

One of the major challenges of any reporting framework is how best to implement it in the context of a specific company or industry. IFRS is a principles based framework and short on industry guidance. PwC looks at how IFRS is applied in practice by oil and gas companies. This publication identifies the issues that are unique to the oil and gas companies industry and includes a number of real life examples to demonstrate how companies are responding to the various accounting challenges along the value chain.

We look at some of main developments in this context with a selection of reporting topics that are of most practical relevance to oil and gas companies’ activities. The new standards on joint arrangements, consolidated financial statements and disclosure of interests in other entities will be of particular interest to companies in the oil and gas sector.

The debate about specific guidance for exploration, evaluation, development and production of oil and gas continues. This publication does not describe all IFRSs applicable to oil and gas entities but focuses on those areas that are of most interest to companies in the sector.

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