Accounting Policy On Oil And Gas Assets At Pt Xyz To Increase The Companys’s Net Profit

This paper focuses on the basis for determining accounting policies for oil andgas assets to increase the company’s net profit. Indonesia has implementedInternational Financial Reporting Standards (IFRS) since 2012, which at thesame time it opens the opportunity for the Company to choose from severalaccounting policy options related to oil and gas assets. The company needs toreview the available options related to the oil and gas contracts owned by theCompany and other factors such as oil and gas reserves, cost and priceprojections. A review of the effect of these options for PT XYZ will be carried out through data owned by the company and comparison with other company’sinformation.The combination of several accounting policies (not just focusing on one ortwo specific choices) will help management to obtain the best results toincrease the company’s net profit. In this case, by changing the company'spolicy for the capitalization of exploration and development expenditure andcombination of the several depreciation methods (units of production andstraight line method) and also the usage of reserves in the broader scope. Theimplementation of these policies needs to be carried out consistently, hencemanagement needs to consider the short and long-term impact to the company'snet profit