FASAB Delays Oil and Gas Standard, Clarifies Application
The Federal Accounting Standards Advisory Board (FASAB) on Wednesday issued a technical bulletin that clarifies how federal entities should report the value of the federal government’s estimated royalties and other revenue from federal natural resources. The board also issued a final standard that delays for one year the effective date of Statement of Federal Financial Accounting Standards (SFFAS) no. 38, Accounting for Federal Oil and Gas Resources.
Technical Bulletin 2011-1, Accounting for Federal Natural Resources Other than Oil and Gas, clarifies that federal entities should report the value of the federal government’s estimated royalties and other revenue from federal natural resources that are (1) under lease, contract or other long-term agreement and (2) reasonably estimable as of the reporting date in required supplementary information (RSI), consistent with the guidance contained in SFFAS no. 38.
“Technical Bulletin 2011-1 applies the general principles developed in SFFAS 38 for federal oil and gas resources to coal and other types of federal natural resources,” FASAB Executive Director Wendy Payne said in a press release. “Reporting additional information on the federal government’s natural resources will provide transparency regarding the value and changes in value of these significant assets and lead to better controls over the management of these assets.”
SFFAS no. 41, Deferral of the Effective Date of SFFAS 38, Accounting for Federal Oil and Gas Resources, defers the effective date of SFFAS no. 38 for one year. SFFAS no. 38, which requires the federal government to report its royalty share of estimated oil and gas production from federal proved reserves and the portion of that share to be distributed to others as required supplementary information, will become effective for periods beginning after Sept. 30, 2012 (that is, on the first day of fiscal year 2013), with earlier implementation encouraged.
All FASAB accounting standards and guidance are available on the board’s website.
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