By: Dr. Robson Glasscock
A brand new class is being offered in the Fall 2015 semester!
Accounting in the Energy Sector
Why you should take it
Exploration and production companies are subject to two different sets of accounting and financial reporting standards. The choice between following the “full cost” method or “successful efforts” method of accounting is a voluntary one. When students learn about accounting, the typical examples used are retail companies and manufacturing companies. A solid understanding of Generally Accepted Accounting Principles (GAAP) for these types of entities will not adequately prepare one for an accounting or financial reporting job with an E&P company. The unique operating environments of these firms necessitate a specialized set of industry specific accounting standards. The full cost and successful efforts methods of accounting are covered in the course with an emphasis placed on the differences between the two. Energy Management MBA students will benefit tremendously from this class.
Why I’m teaching it
I am a licensed CPA, and prior to academia I worked in public accounting as an auditor for energy companies. My teaching style shifts between the “big picture” and the “mechanics” so that people understand both the theory and application- what they are trying to accomplish, why things need to be done in a certain way, and how to go about doing it.
Introduces students to basic financial accounting and reporting issues related to energy producing activities. Specifically, the course will investigate current accounting practices of energy producing companies related to exploration, acquisition, development, and delivery of energy products. The course will also cover financial requirements of the Financial Accounting Standards Board (FASB) and the Securities and Exchange Commission (SEC). The goal is to provide the foundation necessary for people to work in the energy industry as a financial statement analyst, manager, auditor, or accountant.
- Explain the various acquisition methods for mineral interests in property and the terminology commonly used in the energy industry.
- Describe and demonstrate the accounting for non-drilling exploration costs, acquisition costs of unproved property, drilling and development costs, and proved property disposition costs for successful efforts companies.
- Compare and contrast all of the items above with the accounting rules for full cost companies.
- Explain and illustrate the accounting treatment for production activities, inventories, and asset retirement obligations.
- Describe and demonstrate the financial statement disclosures required for oil and gas companies.
I look forward to teaching this class in the Fall and I would love to hear any feedback from industry professionals, faculty, or students about teaching a class like this!
Would you take the class?
Will this class benefit your future hires from the University of Wyoming?
Comment below and let me know.