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At a glance

Public companies must adopt the new revenue standards in 2018. Almost all companies will be affected to some extent by the new guidance, though the effect will vary depending on industry and current accounting practices. Although originally issued as a converged standard, the FASB and IASB have made slightly different amendments so the ultimate application of the guidance could differ under US GAAP and IFRS. This publication only includes guidance related to US GAAP.
The Revenue Recognition Transition Resource Group (TRG) has discussed various implementation issues impacting companies across many industries. These discussions may provide helpful insight into application of the guidance, and the SEC expects registrants to consider these discussions in applying the new guidance.
This publication highlights certain considerations and implementation challenges specific to oil and gas companies. The content in this publication should be considered together with our Revenue guide (RR).

Revenue recognition in the energy industry might appear to be simple. Revenue is generated through the sale of commodities or the performance of services in exchange for consideration. Complexities can arise, however, from certain types of contractual arrangements that are common in the industry, including arrangements between oil and gas producers and processors, and arrangements that include payments in the form of noncash consideration or variable consideration. The complexities in these areas can impact the measurement of revenue or timing of revenue recognition under the new revenue standard (ASC 606, Revenue from Contracts with Customers).
This publication focuses on how the new revenue standard will impact entities in the oil and gas industry and highlights potential differences from current practice under US GAAP. The examples and related discussions are intended to provide areas of focus to assist companies in evaluating the implications of the revenue standard.
This publication is organized into sections impacting individual subsectors of the oil and gas industry; however, some of the topics discussed in each section may be applicable to multiple subsectors.
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