Research On The Expected Impact On The Oil And Gas Industry Of The Accounting Standards Of Revenue From Contracts With Customers

The International Accounting Standards committee (IASC) released Revenue Recognition Criteria (IAS18Revenue Recognition) in1982, and then after a few corrections, reissued it in December1993, and formally implemented on1January1995, which is the current IAS18. The rule is reference to the international accounting standards in many countries, for example in our country. However, with the development of economy, income criterion has showed its inadaptability. And for revenue recognition problem, the views held by different researchers have not been unified. The Generally Accepted Accounting Principles (GAAP)and international financial reporting standards (IFRS) also exist certain differences. In line with constantly improve the standards, to establish a unified standard of the revenue recognition. In December2008, the International Accounting Standards Board (IASB) published for public comment a discussion paper (DP) entitled Preliminary Views on Revenue Recognition in Contracts with Customers. Revenue recognition was put forward a new view of the preliminary opinions, attracted people to focus on revenue recognition problems.The oil and gas industry has its own particularity compared with other industries. The asset types, nature of work, foreign trade and other industries are different with other industries. Oil and gas production activities are high input, high risk mining activities. In terms of risk, in addition to the huge exploration risk, there is huge political risk (foreign) and price risk. In the process of the application of the revenue recognition, it will face a lot of unexpected difficulties and problems, to challenge the current income standards.In order to establish unified revenue recognition model, On24June2010, the International Accounting Standards Board (IASB) and U.S. Financial Accounting Standards Board (FASB) published a joint exposure draft ED/2010/6Revenue from Contracts with Customers. Based on a lot of feedback and to avoid guidelines to produce unpredictable consequences, on14November2011,the International Accounting Standards Board (IASB) issued re-exposure draft ED/2011/6Revenue from Contracts with Customers (’the revised ED’).On28May2014,The International Accounting Standards Board (IASB) issued a new criteria for revenue recognition:the International Financial Reporting Standards.15-the revenue from contracts with customers "(IFRS)15. IFRS15is supposed to be effective since1January2017, allowed to use in advance. In this article, the author will study the oil and gas industry, discuss new revenue recognition model and its expected impact on the oil and gas industry.This article adopts the method of normative research, the main content is divided into six parts:The first part:introduction. Mainly introduces the paper selected topic background and significance of topic selection, to summary and review the existing literature, put forward in this paper, the research ideas, research methods, and pointed out in this paper, the innovations and shortcomings.The second part:the basic theory of oil and gas industry revenue recognition problems. Mainly introduces the content of current income standards, analyze the income criterion in the oil and gas industry issues and challenges faced in the practical application, and then extended line defects and problems of the rule of income.The third part:income criteria and evaluation. This part mainly introduces on28May2014, the International Accounting Standards Board (IASB) issued new guidelines for revenue recognition:the International Financial Reporting Standards.15-the revenue from contracts with customers "(IFRS15).It proposed new model and new ideas about revenue recognition. And its relative analysis of the advantages and disadvantages of the existing standards, significance and shortcomings on the principles of revenue is reviewed.The fourth part:IFRS15expected impactions on oil and gas industry. From the perspective of the oil and gas industry specific business, mainly in Chinese oil group, for example, the new income standards’(IFRS15) influence to the oil and gas industry. The main data analysis from the viewpoint of the following:the capitalization problem, the point to confirm, the credit risk problem, overtake and undertake problem, Oil and gas assets transfer problem.The fifth part:research conclusion and advice of application. To summarize the research content, analyze possible problems in application and its development trend in the future of the proposed rules. Respectively from the angle of the petroleum industry, regulators and standards setters application suggestions are put forward.Through the above research, the author thinks that, the current income standards itself and its implementation to standardize enterprise behavior exist many drawbacks. The reform can effectively curb the occurrence of these irregularities.On the whole there is a lot of positive significance. The implementation of the IFRS15can bring huge influence to various industries, especially for the kind of relatively special industry of oil and gas industry. Therefore, this article also discussed the expected effects of the reform from the angle of the oil and gas industry, to do some contribution to the perfecting standards.