| dc.description.abstract | Reserve Recognition Accounting, the accounting method created by the Securities and Exchange Commission in Accounting Series Release 253 for oil and gas companies, is not an effective disclosure system. An oil company's reported financial position, if reported using Reserve Recognition Accounting, will vary widely and erratically from year to year due to changes in the estimates of reserves and changes in prices of oil. Reserve Recognition Accounting does not provide financial statement users with more information than current accounting methods, and the costs of implementing and maintaining Reserve Recognition Accounting are very high. In addition, investors rely on several sources of information, not just published financial statements. Also, Reserve Recognition Accounting is not an attempt by the Securities and Exchange Commission to become the standards setting body for the accounting profession. The Securities and Exchange Commission has recently decided not to implement Reserve Recognition Accounting and to rely on the Financial Accounting Standards Board to set the disclosure requirements. | en |
