Provisions for oil and gas decommissioning costs: compliance with disclosure requirements by oil and gas companies listed in the UK

Abdo, H. ORCID: 0000-0001-9279-0035, Mangena, M. ORCID: 0000-0002-3005-8110, Needham, G. ORCID: 0000-0003-3173-2506 and Hunt, D., 2017. Provisions for oil and gas decommissioning costs: compliance with disclosure requirements by oil and gas companies listed in the UK. In: A. Ahmi, S.Z. Saidin, N. Sawandi, H. Shaari, O. Muse and J. Popoola, eds., Proceedings of the International Conference on Accounting Studies (ICAS) 2017, Putrajaya , Malaysia, 18-20 September 2017. Kedah, Malaysia: Institute for Strategic and Sustainable Accounting Development (ISSAD), Tunku Puteri Intan Safinaz School of Accountancy, Universiti Utara Malaysia. (Forthcoming)

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Abstract

Due to their complications in terms of uncertainty and calculations provisions for oil and gas decommissioning costs are not easy to be understood and interpret by users of no accounting and finance background. Furthermore, due to their significant sizes, cash outflow effect and importance for decision making disclosing more detailed information seem to be ideal requirement to simplify these complications. This study raises, almost for the first time, queries about compliance, sufficiency, uniformity and fairness of oil and gas companies' disclosure practices with regard to provisions for decommissioning costs. In order to provide answers to the research quires, annual reports of 69 oil and gas companies listed in the UK were analysed and thirteen interviews with different professionals were conducted. Our results reveal that whilst there is sufficient standards to regulate accounting for provisions for decommissioning costs there seems to be lack of compliance with requirements of international accounting standards in terms of disclosing information on provisions for decommissioning costs. In many cases, and probably due to their sensitive nature, we found that oil and gas companies tend to disclose a minimum amount of information about provisions for decommissioning costs.

Item Type: Chapter in book
Creators: Abdo, H., Mangena, M., Needham, G. and Hunt, D.
Publisher: Institute for Strategic and Sustainable Accounting Development (ISSAD), Tunku Puteri Intan Safinaz School of Accountancy, Universiti Utara Malaysia
Place of Publication: Kedah, Malaysia
Date: September 2017
Divisions: Schools > Nottingham Business School
Depositing User: Linda Sullivan
Date Added: 06 Nov 2017 12:41
Last Modified: 06 Nov 2017 12:44
URI: http://irep.ntu.ac.uk/id/eprint/31979

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