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April 2008

Accounting for Oil and Gas Activity

By Himanshu V. Kishnadwala, Chartered Accountant
Reading Time 1 mins

New Page 1RELIANCE INDUSTRIES LTD. — (31-3-2007)

3. Accounting for Oil and Gas Activity :

The Company has adopted ‘Full Cost Method’ of accounting for
its oil and gas activity and all costs incurred in acquisition, exploration and
development are accumulated considering the country as a cost centre. Oil and
gas joint ventures are in the nature of jointly controlled assets. Accordingly,
assets and liabilities as well as income and expenditure are accounted on the
basis of available information, on line-by-line basis with similar items in the
Company’s financial statements, according to the participating interest of the
Company.

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