Exxon's write-downs (or lack thereof)
Exxon Mobil Corp. hasn't written down any of its assets since the drop of oil prices began about two years ago. Some people find that hard to believe, including the New York Attorney General and a number of analysts, and I have to say, their doubts aren't exactly unfounded:
The company had to remove the equivalent of more than 900 million barrels of U.S. natural gas reserves from its books in 2015, an acknowledgment that wells on those properties cannot currently be economically drilled. When it agreed to purchase shale explorer XTO Energy Inc. in 2009 for $31 billion, natural gas sold for almost double what it does now.
For many producers, such losses in net income and reserves would make write-downs inevitable, but Exxon didn’t write down the overall value of its reserves. The lack of such a step at Exxon “raises serious questions of financial stewardship,” Paul Sankey, an oil analyst at Wolfe Research, wrote last month.
“It is impossible to believe that no assets have been impaired,” he said.
The beauty of accounting, as many of you can appreciate, is that people can reach different conclusions on these sorts of things. It happens all the time! But in the case of Exxon, they seem pretty hard-nosed about not letting anyone off the hook when it comes to underperforming assets.
Exxon Chief Executive Rex Tillerson told trade publication Energy Intelligence last year that the company has been able to avoid write-downs because it places a high burden on executives to ensure that projects can work at lower prices, and holds them accountable.
“We don’t do write-downs,” Mr. Tillerson told the publication. “We are not going to bail you out by writing it down. That is the message to our organization.”
One company's write-down is another company's, "Strap up your boots, sonny!" (That's what I imagine Exxon executives, particularly ones named Rex, say.)
Accountants behaving badly
Sometimes what's most fascinating about accountants who steal from their employers is not the act of theft itself, rather the circumstances that allow the theft to happen. In the case of Daniel West, who pleaded guilty to embezzling $3.6 million from his former employer, he "continued to have signature authority on its bank accounts" even after he'd left the company.
Elsewhere in accountants making bad decisions, some idiot took a blow-up doll to the 9/11 memorial. That went over as well as you'd imagine.
And if you enjoy mysteries: "About to be indicted, this Maine accountant went missing 24 years ago."
Has Donald Trump released his tax returns?
Nope! But House Speaker Paul Ryan thinks he should and Massachusetts Senator Elizabeth Warren said he's "too chicken" to release them. Plus, a Politico reporter asked if President Obama would "invoke a provision in the Internal Revenue Code that allows the president to make a written request for any taxpayer's returns." White House press secretary Josh Earnest said it's "rather unlikely" which is too bad because this just isn't enough of a circus yet.
Oh, and here's all the excuses DJT has given so far for not releasing them.
Previously, on Going Concern…
Megan Lewczyk wrote wondered if KPMG would get dragged into the Wells Fargo drama. And in Open Items, someone is wondering about transferring from tax to advisory.
In other news:
- Chinese Tycoon Behind Grindr Will Pay $1.14 Billion in Divorce
- Ugh, iPhone hype. Instead of standing in line, go read about the fictional features instead. Oh, and if you have a Samsung Galaxy Note 7, why haven't you returned it?
- 7 Ways People Quit Their Jobs
- Robots, Robots Everywhere
- Google Blurs Bovine Face For Privacy
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