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Statement No. 25 Suspension of Certain Accounting Requirements for Oil and Gas Producing Companies-an amendment of FASB Statement No. 19 STATUS Issue Date: February 1979 Effective Date: For fiscal years beginning after December 15, 1978 Affects: Amends FAS 19, paragraphs 48 and 63 Supersedes FAS 19, paragraph 271 and footnotes 11 and 12 Affected by: Paragraphs 6 and 8 superseded by FAS 111 Abbreviations for Accounting Pronouncements FAS - FASB Statements FIN - FASB Interpretations FTB - FASB Technical Bulletins APB - APB Opinions AIN - AICPA Interpretations ARB - Accounting Research Bulletins CON - FASB Concepts EITF - EITF Issues Q&A - FASB Implementation Guides SUMMARY FASB Statement No. 19, Financial Accounting and Reporting by Oil and Gas Producing Companies, requires the use of a form of the successful efforts method of accounting and disclosure of reserve quantities, costs incurred, and capitalized costs. The Securities and Exchange Commission (SEC) has incorporated into its rules all the substantive provisions of Statement No. 19 except that the Commission's rules permit, as an acceptable alternative for its reporting purposes, the use of a prescribed form of the full cost method of accounting. In light of this conflict between Statement No. 19 and the SEC's regulations, this Statement: • Suspends the effective date for applying the requirements of Statement No. 19 related to the successful efforts method of accounting. Oil and gas producing companies not subject to SEC reporting requirements thus are permitted to continue their present methods of accounting. • Retains, with revision of the effective date, the income tax allocation requirements of Statement No. 19. Those requirements supersede FASB Statement No. 9, Accounting for Income Taxes-Oil and Gas Producing Companies. • Retains, with revision of the effective date, the requirement of Statement No. 19 to classify production payments payable in cash as debt. • Retains, with revision of the effective date, the requirements of Statement No. 19 related to disclosure of reserve quantities, costs incurred, and capitalized costs, but permits the required disclosure of reserve quantities to be made outside the financial statements. • Requires disclosure of the method of accounting for costs incurred in oil and gas producing activities. • Rescinds the reserve definitions as contained in Statement No. 19 and requires, for financial reporting purposes, the use of the reserve definitions developed by the Department of Energy for its Financial Reporting System and adopted by the SEC for its reporting purposes. Copyright by Financial Accounting Standards Board. All Rights Reserved. Used by Permission.
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