FAIR MARKET VALUE AND VALUATION METHODS OF OIL AND GAS PROPERTIES
There are a number of transactional, reporting, regulatory, and legal reasons why it may be necessary to estimate the value of proven and prospective oil and gas properties. Among other reasons, fair market valuation of oil and gas properties is required when preparing for a sale of an oil and gas p...
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Published in | Petroleum accounting and financial management journal Vol. 33; no. 3; p. 55 |
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Main Authors | , |
Format | Journal Article |
Language | English |
Published |
Denton
University of North Texas
01.10.2014
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Subjects | |
Online Access | Get full text |
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Summary: | There are a number of transactional, reporting, regulatory, and legal reasons why it may be necessary to estimate the value of proven and prospective oil and gas properties. Among other reasons, fair market valuation of oil and gas properties is required when preparing for a sale of an oil and gas property, in establishing value for purposes of state property taxation, in estate and gift taxation and in a variety of legal matters. Numerous accounting standards discuss the need to establish and report fair market values to a variety of stakeholders. Fair market valuation of unproved and proved properties is required assessing properties for possible impairment. Fair market valuation is required when accounting for sales and other conveyances of oil and gas properties. ASC Topic 805 "Business Combinations" also mandates the use of fair market valuation of oil and gas properties acquired or exchanged as a consequence of a business combination. |
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ISSN: | 1554-2904 |