Inconsistent Accounting Practices in Oil Industry Impact Financial Reporting Standards
The article discusses how oil and gas companies account for the impairment of their assets. There are two main methods used: full cost and successful efforts. The Securities and Exchange Commission has different requirements for these methods, causing inconsistencies in reporting. This has led some companies to switch methods to avoid write-downs. The value of oil and gas properties can change drastically due to volatile prices, making accurate reporting challenging.