Impairment Tests

Due to recent declines in oil and gas prices, impairment estimates are a focus of management, the investment community, lenders, and regulators such as the SEC. Our experience with impairments across the energy industry has given us significant insight into the challenges associated with making judgments and estimates required in impairment testing. We commonly assist our clients with the following:

  • Impairment of unproved leasehold
  • Full cost ceiling test, including income tax impacts
  • Impairment of oil and gas properties under successful efforts accounting, including asset grouping, estimating future cash flows, and reserves
  • Reporting considerations, including management’s discussion and analysis and recent SEC comments regarding impairment disclosures