ACCOUNTING

Accounting: How does GAAP, FASB, FPC affect pipe line accounting?



How does GAAP, FASB, FPC impact pipe line accounting for the oil and gas industry?

Introduction

In relation to the oil and gas industry, the pipe line accounting is the process of underwriting that is done with the Securities and Exchange Commission before a security is offered for sale to the public. Moreover, the pipe line accounting is the process in which an underwriter or an oil and gas company carry out all due diligence, files all required paperwork, and makes preparation for a new issue. This type accounting is specially for abiding by the rules and regulations which are issue by the Securities and Exchange Commission for the oil and gas industry; in addition to this, it is a project or an activity that is in the preliminary stages.

GAAP

The primary U.S. GAAP accounting literature for the oil and gas industry is found in FAS. Financial Accounting and Reporting by Oil and Gas Companies, various U. S. Securities and Exchange Commission rules and regulations, and FAS, disclosures about Oil and Gas Producing Activities. Man other accounting standards also directly affect the accounting used in the industry. Under GAAP, there is one standard, GAAP, Exploration for and Evaluation of Mineral Resources that provides limited guidance for all the extractive industries.

The scope of GAAP is limited to accounting for the exploration and evaluation (E & E) of mineral resources. The standard does not “address other aspects of accounting by entities engaged in the exploration for and evaluation of mineral resources.” In other words, GAAP does not deal with the phases of upstream operations that take place before (for instance, prospecting and acquisition of mineral rights) or after (for instance, development, production, and abandonment) exploration and evaluation.

For the pipe line accounting for the oil and gas industry, GAAP impact the pipeline accounting for the oil and gas industry which is the standards of accounting used in the United States and certain other countries. GAAP is different in particular, on the International Financial Reporting Standards by the fact that the GAAP accounting treatment is regulated in detail certain practical situations like the pipe line accounting. For the oil and gas industry, globalization and increased international capital flows are a reality in the contemporary world. More and more companies to obtain funds in the U.S. market, while increasing the participation of American capital in the shareholders of the companies. The accounting world is no stranger to this phenomenon, given that accounting principles generally accepted, the GAAP accounting system make the first world economic power.

In relation to the oil and gas industry, GAAP impact the pipe line accounting which is the method through which security issues pass before the allocation of security in to the general public; moreover, if the shares are being standing by for the allotment then these securities are said to be in the pipe line.

Generally Accepted Accounting Principles impact the oil and gas industry, the main function of the Securities and Exchange Commission ...