Full Cost versus Successful Efforts Accounting Methods in oil and gas

In the exploration and production of oil and gas companies, there are fundamentally two historical accounting methods used in the preparation of the financial statements for financial reporting purposes namely full cost and successful effort. There have been several attempts to get a unified accounting method to ensure comparability of financial statements since the early 1950s originating from the United States. The inability to achieve this goal has resulted in upstream oil and gas companies choosing the method that meets the nature of their activities, operations, and firm characteristics. In this study, the researcher conducted a comparative analysis of how the choice of accounting methods by full cost and successful efforts firms in the upstream oil and gas companies impacts on their risks using financial and operating leverage as proxies over the past 5 years. Secondary data from annual reports, textbooks, articles, journals was used for the purpose of interpretation and analysis with the help of Microsoft Excel and Statistical Package for Social Sciences (SPSS). Both qualitative and quantitative methodology was deployed in this research.

Autorentext

Atta Acheampong è un commercialista che ha conseguito una laurea in contabilità presso la University of Ghana Business School e un master in contabilità del petrolio e del gas presso la Robert Gordon University, Regno Unito. Attualmente lavora nel settore upstream del petrolio e del gas come economista. È docente presso l'Università di Studi Professionali del Ghana.