Kpmg Impact of Ifrs Oil and Gas

ENERGY & NATURAL RESOURCES

Impact of IFRS:

Oil and Gas

kpmg.com/ifrs

KPMG International

Contents

Overview of the IFRS conversion process 2 Accounting and reporting issues 3 1. Exploration and evaluation (E&E) assets 5 2. Depletion, depreciation and amortisation (DD&A) 8 3. Impairment of non-financial assets 10 4. Decommissioning and environmental provisions 12 5. Joint arrangements 14 6. Revenue recognition 16 7 Reserves reporting . 18 8. Financial instruments 20 Information technology and systems considerations From accounting gaps to information sources How to identify the impact on information systems Oil and gas accounting differences and respective system issues Parallel reporting: Timing the changeover from local GAAP to IFRS reporting Harmonisation of internal and external reporting People: Knowledge transfer and change management Business and reporting Stakeholder analysis and communications Audit Committee and Board of Directors considerations Monitoring peer group Other areas of IFRS risks to mitigate Benefits of IFRS KPMG: An Experienced Team, a Global Network Contact us

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Impact of IFRS: Oil and Gas 1

Foreword

Accounting for oil and gas activities presents many difficulties. Significant upfront investment, uncertainty over prospects and long project lives have led to a variety of approaches being developed by companies, and a range of country-specific guidance for the sector. As countries around the world adopt IFRS, accounting approaches for affected companies may need to be reassessed. Many countries converted to IFRS in 2005 and conversions are imminent for other countries such as Canada and...