The adoption of Accounting Standards Codification, ASC 606, was enacted in 2014 with a deadline of December 21, 2019 for nonpublic entities to come into compliance. Also known as IFRS 15, it is a revenue recognition model designed to increase financial statement comparability among companies. These standards include a particular distinction that applies to imbalanced oil and gas parties. This level of detail is probably not where you want to spend your time in management meetings.
Revenue, however, is the starting point for ultimate profitability. It's a factor in management contracts, loan documents, award-based compensation agreements, and buy-sell provisions. With so much riding on revenue, knowing that your company is recognizing it correctly is both legally prudent and mission-critical. This is especially true in an industry that is still based on personal relationships.
The energy industry is inherently more complex and nuanced than most other sectors, faced with changing rules. These are federal regulatory requirements, individual state tax codes, national accounting standards, and independent financial reporting metrics, amongst others. Today, staying in compliance, correctly training employees, and implementing new policies and procedures can be a challenge. These new standards are certainly more complex than previous methodologies, but they're more accurate in regards to capturing revenues in the appropriate period.
As leaders in the outsourced oil and gas accounting domain, we are always following updated operation requirements and adapting to the changing reporting landscape. We can walk you through the technical steps of recognizing the appropriate level of revenue in the correct reporting period per ASC 606, and we'll ensure that your organization is set up in the most efficient and functional manner.
Struggling with gas balancing? Unsure if your team is following the current protocols? Give us a call for a free consultation.
The journey from old to new oil and gas software can be an arduous one. On top of the complications that can arise during the data conversion process, many companies come to realize post-conversion that their new software may not be as good of a fit as they believed. But data conversions are costly, time-consuming projects; you really want to get these right the first time. With over 25 years of experience migrating client data, we’ll be there to help you make the decision that’s best for your business, whether your data comes from industry-standard applications, QuickBooks, legacy software, or any other unsupported systems. Our scoping process is thorough, and we’ll recommend the application we think is the best for you after some conversation about your needs. But before you decide to pull the trigger on a data conversion, here are three important questions your company should consider.
Nothing is scarier during Halloween season than knowing your 1099 filing deadlines are creeping closer. We know how much of an enormous headache the 1099 filing process is— that’s why it’s one of our most-requested services we offer to our clients. But there’s no need to stress this year: here is how outsourcing your 1099 processing can help you relax this season.
An inaccurate division order can spell a lot of trouble for all parties involved. Mispayments are not always detected expeditiously, and they can often create practical and legal challenges if they are not resolved quickly. However, the unfortunate reality for operators is that, without thorough oversight, inaccuracies are inevitable, especially when you factor in varying division order laws from state to state. These mispayments are usually caused by simple human error: miscalculations, typos, system errors, ownership analysis errors, and so on.
Our vision at PetroLedger is to be the partner of choice within the oil and gas industry for outsourced accounting and transaction services by employing the best-in-class people and processes across multiple technology platforms. Our most experienced and versatile staff resides in our Professional Services department. If you ask any of our staff, they will say it’s very rewarding to see the before and after version of their books. The PetroLedger team is a set of superheroes that transform and correct your data to better serve your organization.