Introduction

This Joint Venture Accounting training course is designed to develop the essential skills necessary to prepare and evaluate joint venture accounts and to improve the organization’s account function. Our course is aimed at accounting professionals wishing to deepen their knowledge of the accounting procedures applied to joint venture.

This training course also covers several issues regarding the relationships between operators and non-operators in joint ventures, the financing of joint venture operations and the reporting of joint costs.

This is an intensive and highly practical training program concentrating on aspects of accounting that are unique to this industry. As well It will enable you to know how to apply a series of major financial accounting principles and standards that are particularly relevant to upstream oil and gas activities.

Course Objective

By the end of this training course, you will be able to understand

·         The structure of joint ventures in the oil and gas industry.

·         The applied structured methodology for conducting oil industry in joint-venture.

·         The different accounting method for joint ventures.

·         The account for interests in joint operations.

·         The main clauses are contained in joint operating agreements.

·         The accounting procedures are set out in joint operating agreements and production sharing contacts.

·         The differences in accounting treatments of costs for IFRS reporting and cost recovery purposes.

·         Application of series of major financial accounting principles and standards that are particularly relevant to oil and gas activities.

·         The different types of Joint Venture agreements and the accounting implications of each.

·         Accounting issues related specifically to joint interests. 

Training Methodology

A highly interactive combination of lecture and discussion sessions will be managed to maximize the amount and quality of information, knowledge and experience transfer. The sessions will start by raising the most relevant questions, and motivate everybody finding the right answers. The attendants will also be encouraged to raise more of their own questions and to share developing the right answers using their own analysis and experience.

 

 Course Outline

 Day 1:

Introduction to Accounting in Oil & Gas industry

·         Characteristic Features of the Oil and Gas Industry.

·         Overview of oil and gas accounting.

·         The impact of commodity prices, currency & interest rate instability.

·         Differences between IFRS principles and US GAAP.

·         Joint venture agreement in Oil & Gas Sector. 

Day 2:

 Joint Venture Nature & Forms

·         Joint Venture Definition, Features and Characteristics.

·         Typical Provisions of Joint Venture Agreements.

·         Relationship between Operator and Non-operator Participants.

·         Corporate Joint Ventures.

·         Limited Partnership.

·         Undivided Interest.

·         Limited Liability Companies / Partnership. 

Day 3:

Accounting for Joint Venture

·         Methods of accounting for joint venture:

o    Proportionate consolidation.

o   Equity method.

·         Alternative treatments.

·         Choice of legal framework.

·         Accounting for the tax treatment: Formation:

o   Maintenance of Accounting.

o   Allocation & Substantial economic effect.

o   Level of involvement.

o   Undivided Interests. 

Day 4:

 J V Accounting in Practice

·         Accounting for Contributed Property.

·         Revenue Recognition Relating to Over and Under-lifting.

·         Budgets and Approvals.

·         Cash-calls Billing Statements and Reporting of Expenditures.

·         Responsibility of Operator to Provide Sufficient Timely Information.

Day 5:

  Major Accounting Issues in Joint Venture

·         Accounting Issues related to Joint Venture Operations.

·         IFRS 11 Joint Arrangements and IAS 28 Investments in Joint Ventures.

·         Relationship between Operator and Non-operator Participants.

·         The Financing of Joint Ventures – Billing Statements and Cashflow Reporting.

·         Reporting of Expenditures.

·         Cost Allocation Methods and Issues .