42 U.S.C. § 6383: Accounting practices

Summary

Require the Securities and Exchange Commission (SEC) to create accounting rules for companies that produce crude oil or natural gas in the United States so a reliable energy database can be made. The SEC must finish the rules no later than 24 months after December 22, 1975. The rules apply to any company’s fiscal year that begins 3 months after the rules are issued or recognized under the SEC’s authority. The SEC must talk with the Secretary, the Government Accountability Office, and the Federal Energy Regulatory Commission. The SEC may rely on rules from the Financial Accounting Standards Board if it is sure companies will follow them the same as if the SEC had made the rules. The SEC must let people send written comments and can extend the 24-month deadline to allow more comment time. The accounting rules must, as much as possible, separate U.S. and foreign operations and allow a database that shows capital, revenue, and operating costs for prospecting, acquisition, exploration, development, and production. They must cover costs like geological and geophysical work, carrying costs, failed exploratory or development wells, intangible drilling and development costs on productive wells, and buying reserves by other means. The rules must also cover transfers, special contracts, joint operations, book-versus-tax differences, and transfer prices between related parties. They must require full disclosure of reserves and operating activity and organize financial data so it matches reserve and operating statistics, plus any other needed information to build the database.

Title 42, §6383

The Public Health and Welfare, Source: USLM XML via OLRC

(a)Development by Securities and Exchange Commission; time of taking effect

For purposes of developing a reliable energy data base related to the production of crude oil and natural gas, the Securities and Exchange Commission shall take such steps as may be necessary to assure the development and observance of accounting practices to be followed in the preparation of accounts by persons engaged, in whole or in part, in the production of crude oil or natural gas in the United States. Such practices shall be developed not later than 24 months after December 22, 1975, and shall take effect with respect to the fiscal year of each such person which begins 3 months after the date on which such practices are prescribed or made effective under the authority of subsection (b)(2).

(b)Consultation with Secretary, Government Accountability Office and Federal Energy Regulatory Commission; rules; reliance on practices developed by Financial Accounting Standards Board; opportunity to submit written comment

In carrying out its responsibilities under subsection (a), the Securities and Exchange Commission shall—

(1)consult with the Secretary, the Government Accountability Office, and the Federal Energy Regulatory Commission with respect to accounting practices to be developed under subsection (a), and

(2)have authority to prescribe rules applicable to persons engaged in the production of crude oil or natural gas, or make effective by recognition, or by other appropriate means indicating a determination to rely on, accounting practices developed by the Financial Accounting Standards Board, if the Securities and Exchange Commission is assured that such practice will be observed by persons engaged in the production of crude oil or natural gas to the same extent as would result if the Securities and Exchange Commission had prescribed such practices by rule.

The Securities and Exchange Commission shall afford interested persons an opportunity to submit written comments with respect to whether it should exercise its discretion to recognize or otherwise rely on such accounting practice in lieu of prescribing such practices by rule and may extend the 24-month period referred to in subsection (a) as it determines may be necessary to allow for a meaningful comment period with respect to such determination.

(c)Requirements for accounting practices

The Securities and Exchange Commission shall assure that accounting practices developed pursuant to this section, to the greatest extent practicable, permit the compilation, treating domestic and foreign operations as separate categories, of an energy data base consisting of: (1)

(2)The full presentation of the financial information of persons engaged in the production of crude oil or natural gas, including—

(A)disclosure of reserves and operating activities, both domestic and foreign, to facilitate evaluation of financial effort and result; and

(B)classification of financial information by function to facilitate correlation with reserve and operating statistics, both domestic and foreign.

(3)Such other information, projections, and relationships of collected data as shall be necessary to facilitate the compilation of such data base.

Notes & Related Subsidiaries

Editorial Notes

Amendments

2004—Subsec. (b)(1). Pub. L. 108–271 substituted “Government Accountability Office” for “General Accounting Office”. 1998—Subsec. (b). Pub. L. 105–388, § 5(a)(15)(A), substituted “with respect to” for “with repect to” in concluding provisions. Subsec. (c)(1). Pub. L. 105–388, § 5(a)(15)(B), substituted “, controlling,” for “controlling” in concluding provisions.

Statutory Notes and Related Subsidiaries

Transfer of Functions

“Secretary” and “Federal Energy Regulatory Commission” substituted for “Federal Energy Administration” and “Federal Power Commission”, respectively, in subsec. (b)(1) pursuant to section 301, 402, 703, and 707 of Pub. L. 95–91, which are classified to section 7151, 7172, 7293, and 7297 of this title and which terminated the Federal Energy Administration and transferred its functions (with certain exceptions) to the Secretary of Energy and terminated the Federal Power Commission and transferred its functions to the Federal Energy Regulatory Commission and the Secretary of Energy.

§6383 Accounting Practices