Recognition of Reserve Values in the Extractive Industries
An issue that focuses clearly on the difference between market and book values is accounting for reserves in the extractive industries. The primary determinant of the value of a minerals or oil and gas producer is the value of the reserves that the firm controls. Hence, one might expect that managers acting to maximize the value of the firm would try to account for the value of reserves in a credible way. However, we show in this paper that financial statement recognition of reserve values is rare. We survey the frequency of reserve value disclosures and related accounting procedures. We review the reasons for the general reluctance to recognize reserve values in financial statements and outline the few exceptions where the value of reserves is recognized.
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|Item Type:||Journal Article|
|Keywords:||extractive industries, mineral reserves, reserve values|
|Subjects:||Australian and New Zealand Standard Research Classification > COMMERCE MANAGEMENT TOURISM AND SERVICES (150000) > ACCOUNTING AUDITING AND ACCOUNTABILITY (150100)|
|Divisions:||Current > QUT Faculties and Divisions > QUT Business School|
|Copyright Owner:||Copyright 1990 CPA Australia|
|Copyright Statement:||Reproduced in accordance with the copyright policy of the publisher|
|Deposited On:||21 May 2007|
|Last Modified:||05 Jan 2011 23:27|
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