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ИД «Финансы и кредит»






International Accounting

Measurement of mineral resources extracted as part of the production sharing agreement: Specific features

Vol. 22, Iss. 8, AUGUST 2019

Received: 27 May 2019

Received in revised form: 24 June 2019

Accepted: 3 July 2019

Available online: 15 August 2019


JEL Classification: M41, M48, Q35

Pages: 872–884


Zyleva N.V. University of Tyumen (UTMN), Tyumen, Russian Federation

ORCID id: not available

Ruf Yu.N. University of Tyumen (UTMN), Tyumen, Russian Federation

ORCID id: not available

Subject Measurement of accounting items is always of relevance, since this reflects the existing property of a business entity. Due to the poor description of measurement methods in regulatory documents, regulatory discrepancies, rare terms and their differing interpretations across regulations, it is difficult to evaluate the output produced under production sharing agreements. The existing measurement methods are disputable, failing to show the actually incurred costs.
Objectives The study identifies the challenging point in the measurement of mineral resources extracted under production sharing agreements as finished products. We make our suggestions in accordance with the effective laws.
Methods The study employs methods of comparison and analysis.
Results Analyzing the Russian regulations and scholarly proceedings on accounting for mineral resources produced under production sharing agreements, we find out that some regulations are difficult to use due to missing clarifications. We suggest how such difficulties in output measurement should be eliminated.
Conclusions and Relevance It is necessary to update the Instructions on Accounting and Financial Reporting of Transactions as Part of Production Sharing Agreements and align them with the effective federal standards. If accounting guidelines for transactions under production sharing agreements are at least updated concerning the measurement of finished products and our recommendations are considered, this will harmonize the accounting practice and the specifics of the above agreements. The article and its materials may prove useful in the theory of financial accounting and practices of entities operating under the above agreements.

Keywords: production sharing agreement, evaluation, contingent estimation, output, cost-recovery product, profit product


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