Oil and gas operators, drilling contractors, and their trade associations have voiced concern about proposed accounting changes they fear would complicate contractual relationships, confuse investors, and raise administrative costs.
The proposal relates to leases of property and equipment. The changes would make companies account for leases with terms greater than 1 year as assets—or capitalized—in financial reports. They would not apply to leases of mineral rights but, as currently worded, potentially would treat drilling contracts as leases requiring new levels of reporting.
The Financial Accounting Standards Board (FASB) and International Accounting Standards Board (IASB) want to impro...