Study On Obligation To Retire Oil And Gas Assets

In recent years,China's economic development has gradually changed from the initial crude development mode to the intensive development mode,from the initial focus on production quantity and ignoring other factors to the current focus on the combination of development and environment,and take the sustainable development route.Due to the particularity of the oil and gas exploration and development industry,the environment is damaged greatly in the development and production stage.Therefore,at the end of the life of the oil and gas field,the oil and gas production enterprises need to undertake the corresponding obligations of oil and gas assets disposal.American Accounting Standards Board(FASB)and international accounting standards board(IASB)have already issued accounting standards related to oil and gas asset retirement obligations.Slightly different from FASB,FASB specially issued accounting standards for oil and gas asset retirement obligations,while IASB scattered the relevant standards of asset retirement obligations among several standards.The relevant standards of oil and gas asset retirement obligation in China started late.In 2006,in order to conform to the international standards,the company revised the accounting standards for business enterprises on a large scale,so it incorporated the oil and gas asset retirement obligation into the accounting standards of China.Its form is similar to that of IASB.It scattered the relevant standards of oil and gas asset retirement obligation among a number of accounting standards and did not issue any special standards for oil and gas assets accounting standards for dereliction obligations.However,China's relevant standards on the obligation of oil and gas assets abandonment are relatively general,and some operation details have not been issued more detailed standards or guidelines,which brings certain difficulties to China's oil and gas exploration and development enterprises in the implementation of the standards,but also increases some space for subjective judgment.This paper focuses on the obligation of oil and gas assets disposal,using comparative analysis,case analysis and interviews.First of all,this paper makes a comparative analysis of the relevant standards of US GAAP and IFRS on the obligation of oil and gas assets abandonment,and then analyzes the relevant standards of oil and gas assets abandonment in accordance with China,and compares with the international standards to find out the deficiencies,and then finds out the reference for the practical operation of the obligation of oil and gas assets abandonment in China from the international standards.The case s energy company selected in this paper is a real oil and gas exploration and development enterprise,which is also not in the previous literature.S Energy Company is a small oil and gas company engaged in offshore oil and gas exploration and development in China.It first confirmed the obligation of oil and gas assets disposal in accounting in 2006 due to the large-scale revision of accounting standards,but some of its practices are still questionable.In this paper,three schemes are used to recalculate the obligation of abandonment of oil and gas assets.It is found that S Energy Company underestimates the obligation of abandonment at the end of the life of oil and gas fields,which is not in line with the principle of accounting conservatism.After re calculation,it is found that the impact on the operating performance of S Energy Company in 2007-2018 is to significantly reduce its net profit,and the obligation of S Energy Company to dispose oil and gas assets is significantly underestimated,which is not in line with the principle of accounting prudence.From the perspective of contract,this paper analyzes the impact of the measurement results on the contractual relationship between the enterprise and management,firms,investors,suppliers and other stakeholders,and puts forward corresponding suggestions for the financial practitioners in the oil and gas industry from the perspective of "industry finance integration".China's accounting standards have no clear provisions on the recognition of the discount rate of oil and gas assets retirement obligations.This paper gives three ways to choose the discount rate of oil and gas assets retirement obligations in the process of recalculation,which is highly operable.The influence of the process of accounting treatment and the important implementation factors on the implementation results from the inside of the enterprise is the influence of the existing theory in practice Supplement to the above.On this basis,this paper summarizes the confirmation path map of oil and gas assets retirement obligation,which enhances its operability.At present,China is gradually liberalizing the barriers of oil and gas exploration and exploitation,gradually putting out oil and gas exploration blocks for public bidding,and attracting more state-owned and private capital to enter this field.The research in this paper provides a good reference for the new enterprises in this industry.In addition,the evaluation system of internal managers of state-owned enterprises in China is different from that of private companies in European and American capitalist market economy.This study shows that once the compensation contract between state-owned enterprises and managers is signed,the impact of accounting standards will still affect the managers' accounting motivation through the contract,which provides a new way for empirical accounting theory Evidence.