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This course is aimed at those non-accountants who wish to gain an appreciation of
how accounting is carried out in today’s oil and gas industry. It covers the basics of
accounting, company reporting, interpreting financial statements and company
taxation. The course is suitable for a wide-ranging audience. People from inside and
outside the oil and gas industry will find the course valuable.
At the end of the course, the participants will:
- Understand the reasons for the need to prepare accounts.
- Be able to prepare profit and loss accounts.
- Be able to prepare balance sheets.
- Be able to analyse and interpret company financial statements.
- Understand the different company reporting requirements.
- Understand the Australian system of taxation as it applies to oil and gas
companies.
Contents
Introduction – Why prepare accounts? Regulatory and reporting obligations. Types of
accounts prepared and their purposes. The users of accounting information. The
format and style of accounts. Statutory requirements. Annual returns to the stock
exchange. Annual reports.
Profit and loss accounts – Purpose and content. Review of oil industry examples.
Review of costs and accumulations. How costs are coded and revenue characterised.
Methods of depreciation. Calculation of profits and losses. Dividends.
Balance sheets – Purpose. Content. Review of oil and gas industry examples.
Information available on a balance sheet.
Accounting standards – The role of accounting standards. International and local
standards. The status of accounting standards and legal obligations. Examples of
accounting standards. “Area of interest” concept. The role of accepted standards
and interpretation of these principles. The statutory role of the director in preparing
accounts and the annual report to shareholders.
Reports to management – Requirements of management. Cash flow reporting. Cost
and profit reporting. Management indicators. Critical reports. Review of examples.
Reports to shareholders – Statutory obligations under corporate law. Annual report.
Director’s report. Auditor’s report. Chairman’s correspondence.
Reports to the stock exchange – Stock exchange listing rules. Continuous reporting
of material events. Identifying report requirements. Review of example quarterly
and six monthly reports.
Reports to lenders and financial institutions – Cash flow reports. Management
reports. Special purpose reports. Tracking forward, hedging and option positions.
Annual report – Corporations law requirements on content and style. Market
expectations on disclosures. Review of examples. Identifying relevant issues
including – forward sales, area of interest, cash flow reports, borrowing and
repayment schedules, contingent liabilities, environmental expenditures, auditor
comments.
Audits – The statutory role of the auditor. Case Law precedents regarding auditors’
responsibilities. The auditor’s responsibility for negligence and insurance coverage.
User’s rights regarding the auditors and directors. The auditors’ responsibility to
report breaches of the corporations Law.
Interpretation of financial statements – Workshop using example accounts,
presentations and interpretation of results.
Taxation - The basic rules for the calculation of the taxes payable. Review of
typical company income tax, Fringe Benefits tax and payroll tax returns. The timing
of payments to different taxing authorities.
Royalties, Excise and Petroleum Resource Rent (“PTRR”) tax – Description of
regimes. Reviews of typical royalty, excise and PTRR returns.
Goods and Services tax (“GST”) – Review of basic rules. Examination of key
concepts. Exports and local consumption of petroleum products. Registration
requirements. Cash flow positions and recovery of input credits. Calculation of a
typical company’s GST. The problems of GST for the oil and gas industry.
Zone of Cooperation- Area A (“ZOCA”) – Location and status. Statutory
requirements. Review of a typical ZOCA agreement. Calculating obligations and
corporate taxes payable in Australia and Indonesia. Unresolved tax issues.
Conclusions – Review of objectives. Summary of key elements of the course.
Practical comments related to course participants. Quality of information and
quality of management. Director’s responsibility to shareholders and financial
markets.
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