Properties subject to amortization, accounted for using the full cost method of accounting, net of accumulated depletion
of $131,832 and $44,714, respectively
Under the full cost method of accounting, capitalized oil and gas property costs less accumulated depletion
and net of deferred income taxes (full cost pool) may not exceed an amount equal to the present value, discounted at 10%, of estimated future net revenues from proved oil and gas reserves less the future cash outflows associated with the asset retirement obligations that have been accrued in the balance sheet plus the cost, or estimated fair value, if lower of unproved properties and the costs of any properties not being amortized, if any.
This accounting method further requires that capitalized oil and gas property costs less accumulated depletion
and net of deferred income taxes may not exceed an amount equal to the present value, discounted at 10%, of estimated future net revenues from proved oil and gas reserves plus the cost, or estimated fair value, if lower, of unproved properties.
Consolidated Balance Sheet As of March 31 2000 1999 ASSETS Current Assets Cash and cash equivalents $ 116,421 $ 440,805 Accounts receivable, trade 65,206 60,809 Inventory 67,297 126,326 Other 67,373 34,575 Total Current Assets 316,297 662,515 Property and Equipment, at cost 168,756 114,649 Less Accumulated depreciation (90,161) (71,515) Net Property and Equipment 78,595 43,134 Oil and Gas Properties, at cost 27,707,069 26,042,456 Less Accumulated depletion
(7,290) -- Net Oil and Gas Properties 27,699,779 26,042,456 Total Assets $ 28,094,671 $ 26,748,105 LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Accounts payable and accrued expenses $ 150,457 $ 194,408 Total Current Liabilities 150,457 194,408 Stockholders' Equity Common stock, $.
The principal changes were a decrease to gross oil and gas property, a decrease to depletion expense and related accumulated depletion, a decrease in net cash flow provided by operating activities, a decrease in net cash flow used in investing activities and an increase to net income and earnings per share.
143, "Accounting for Asset Retirement Obligations" effective January 1, 2003 and recognized a charge representing the cumulative effect of the transition to accounting for asset retirement obligations, asset retirement costs and accumulated depletion and accretion in accordance with the new standard.
The ceiling test is a cost recovery test whereby the capitalized costs less accumulated depletion
and depreciation, future site restoration and abandonment and future income tax liabilities are limited to an amount equal to the estimated undiscounted future net revenues from proved reserves less estimated recurring general and administrative expenses, future site reclamation and abandonment costs, future financing costs and income taxes.