Compare the performance of BP relative to ExxonMobil

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Reference no: EM133132981

Question - British Petroleum's income statement was prepared using IFRS is presented below (in $ millions).

Group income statementFor the year ended 31 December




2013

2012

 

Sales and other operating revenues

379,136

375,765

 

Earnings from joint ventures-after interest and tax

447

260

 

Earnings from associates-after interest and tax

2,742

3,675

 

Interest and other income

777

1,677

 

Gains on sale of businesses and fixed assets

13,115

6,697

 

Total revenues and other income

396,217

388,074

 

Purchases

298,351

292,774

 

Production and manufacturing expenses

27,527

33,926

 

Production and similar taxes

7,047

8,158

 

Depreciation, depletion and amortization

13,510

12,687

 

Impairment and losses on sale of businesses and fixed assets

1,961

6,275

 

Exploration expense

3,441

1,475

 

Distribution and administration expenses

13,070

13,357

 

Fair values gain on embedded derivatives

(459)

(347)

 

Profit before interest and taxation.

31,769

19,769

 

Finance costs

1,068

1,072

 

Net finance expense relating to pensions and other post-retirement benefits

480

566

 

Pofit before taxation

30,221

18,131

 

Taxation

6,463

6,880

 

Profit for the year

23,758

11,251

 

Attributable to



 

BP shareholders

23,451

11,017

 

Non-controlling interests

307

234

 


23,758

11,251

 

Earnings per share-cents



 

Profit for the year attributable to BP shareholders



 

Baisc

123.87

57.89

 

Diluted

123.12

57.50

 

ExxonMobil Corporation's income statement prepared using U.S. GAAP is presented below (in $ millions).

Consolidated Statement of Income


2013

2012


(millions of dollars)

Revenues and other income

420,836

451,509

Sales and other operating revenue (I)



Income from equity affiliates

13,927

15,010

Other income

3,492

14,162

Total revenues and other income

438,255

480,681

Costs and other deductions



Crude oil and product purchases

244,156

263,535

Production and manufacturing expenses

40,525

38,521

Selling, general and administrative expenses

12,877

13,877

Depreciation and depletion

17,182

15,888

Exploration expenses, including dry holes

1,976

1,840

Interest expense

9

327

Sales-based taxes (I)

30,589

32,409

Other taxes and duties

33,230

35,558

Total Costs and other dedctions

380,544

401,955

Income before income taxes

57,711

78,726

Income taxes

24,263

31,045

Net income including noncontrollin interests

33,448

47,681

Net income attributable to noncontrolling interests

868

2,801

Net income attributable to ExxonMobil

32,580

44,880

Earnings per common share (dollars)

7.37

9.70

Earnings per common share - assuming dilution (dollars)

7.37

9.70

Required -

A. Are expenditures reported on BP's income statement reported by function or by nature of the expense? Be specific. Do you think that this format is more or less useful for users of the financial statements?

B. On the BP income statement, what is the "earnings from associates" usually called in the U.S.?

C. On ExxonMobil's income statement, are the expenses listed by function or by nature?

D. Compare the performance of BP relative to ExxonMobil. Is it easy to compare the numbers from companies using IFRS to companies using U.S. GAAP?

E. Does it matter that BP is using FIFO and ExxonMobil is using LIFO for inventory? The LIFO reserve decreased by $282 million in 2013.

Reference no: EM133132981

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