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

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

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 $15.4 billion in2008.

  • CreatedMarch 13, 2015
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