[Kelly_W]

What is a good way to sum this up?

I know there are some differences in revenue recognition, costs, and tax.

– I believe that generally revenue is recognized when the oil is discovered, regardless of when it is actually extracted and sold?

– Costs, well this is basically broken down into success efforts vs full cost. I just can’t seem to understand why anyone would want to do successful efforts… businesses so often try to capitalize certain costs and are not allowed to, so why on earth would someone want to expense a dry hole cost rather than being able to capitalize it? IFRS only allows SE, but is that the only advantage for American companies to use SE over FC?

– Percentage depletion vs cost depletion.. similar to mining with some differences in the cutoffs and thresholds?

[Kelly_W]

…

[JoeL]

Man, This is not covered in CPA exams, forget it, wasting your time.

[Author]

Replies