RegulationAccounting StandardsFair-value accounting bites into US energy cos

Fair-value accounting bites into US energy cos

Fair-value accounting has taken bites off energy companies’ second-quarter earnings

Several US companies have reported sharp drops in profits, affected by the
high oil and gas prices on their valuations of derivatives, which were measured
at fair value on June 30.

Finance executives who recalculated the fair-value assessments a month later,
after oil prices declined, however, had a more positive story to tell and now
expect their third-quarter results to reflect that change, cfo.com
reports.

Roger Manny, chief financial officer of oil and gas company
Range Resources, at
a recent conference call with investors, revealed the company’s $US164m (?89m)
noncash accounting charge — taken when it applied fair value to its open
commodity derivatives — would have been “completely eliminated” had the company
made its calculations on July 23.

Further reading:

Read
the cfo.com story

Related Articles

EY fined £1.8m over Tech Data audit

Accounting Standards EY fined £1.8m over Tech Data audit

2d Emma Smith, Managing Editor
The great professional services shake-up

Accounting Standards The great professional services shake-up

4w Fergus Payne, Lewis Silkin
What do clients actually want from an accountant?

Accounting Standards What do clients actually want from an accountant?

2m Emma Smith, Managing Editor
IASB overhauls insurance accounting with issuance of IFRS 17

Accounting Standards IASB overhauls insurance accounting with issuance of IFRS 17

5m Alia Shoaib, Reporter
Flag It Up! How accountants can protect themselves from money launderers

Accounting Standards Flag It Up! How accountants can protect themselves from money launderers

7m Emma Smith, Managing Editor
Accountants shouldn’t neglect hybrid mismatch anti-avoidance rules

Accounting Standards Accountants shouldn’t neglect hybrid mismatch anti-avoidance rules

3m Alison Conley
Membership of the accountancy profession on the rise

Accounting Standards Membership of the accountancy profession on the rise

3m Alia Shoaib, Reporter
The real price of mates' rates in the provision of professional services

Accounting Standards The real price of mates' rates in the provision of professional services

3m DAC Beachcroft