Anton Oussov, Partner and Head of KPMG's Oil & Gas Practice in Russia and the CIS comments on the 2014 financial statements published by oil & gas majors: for some of them the oil price drop and its subsequent stabilisation at USD60 resulted in asset portfolio reviews and impairment write-offs.
"The impairment scope depends not only on the economic environment and a company's situation, but also on the accounting methodology. We believe the key reason for such a gap in write-offs by US and European companies is the different impairment criteria used in IFRS and US GAAP. Investors should be aware of the difference in accounting standards and take it into consideration when looking at the financial statements of oil & gas majors. Before analysing the data provided, the investor should first find out which accounting methodology was used. As we all know, 2 + 2 can equal 5 under certain conditions," concludes Anton.