Have you received an offer to acquire nonessential unproved property? Below we consider key aspects to mineral conveyances.
当未经证明的财产被出售或交换时, the accounting treatment depends on the answers to a few questions.
会计处理注意事项
- Is the impairment of unproved properties recorded individually or on a group basis?
- Is the conveyance an entire interest or only a partial interest?
Sale of an entire working interest in unproved properties
If the entire interest in an unproved property is sold, the recognition of gain or loss depends on the method used to determine lease impairment. 如果损伤是单独评估的, ASC 932-360-55-8 requires recognition of a gain or loss as the difference between the proceeds received and the property’s net carrying value. However, if the unproved property’s impairment was determined as a group, the treatment is different. ASC 932-360-55-8规定, “For a property amortized by providing a valuation allowance on a group basis, neither gain nor loss shall be recognized when an unproved property is sold unless the sales price exceeds the original cost of the property, in which case gain shall be recognized in the amount of such excess.”
Sale of a share of a working interest in unproved properties
If sales proceeds for a partial interest exceed the entire original cost of the property assessed for impairment within a group, or if such proceeds exceed the carrying amount of a property assessed for impairment individually, 应记录增益. Any loss on the sale is recognized by using the impairment test.
Sale of a working interest but maintaining an override
If the working interest is sold for cash and an overriding royalty interest, net profits interest or production payment is retained, 该转让视为转租. A sublease is treated like selling part of an unproved property interest, and the unrecovered book value is assigned to the retained nonoperating interest.
If you have any questions on conveyances of mineral assets, reach out to 洛根Kowcheck.
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