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).


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 €œearnings 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.

Consolidated Statement of Income 2008 2007 (millions of dollars) Revenues and other income Sales and other operating revenue (1) Income from equity atfiliates Other income (2) $459,579 11,081 6,699 $477.359 $390,328 8,901 5,323 $404,552 Total revenues and other income Costs and other deductions Crude Production and manufacturing expenses Selling, general and administrative expenses Depreciation and depletion Exploration expenses, including dry holes Interest expense Sales-based taxes (1) Other taxes and duties Income applicable to minority interests S249,454 87,905 15,873 12,379 1,451 673 34,508 41,719 1.647 $199,498 31,885 14,890 12,250 1,469 400 31,728 40,958 1,005 884,078 70,474 29.864 oil and product purchases Total costs and other deductions $ 81,750 86,530 $45,220 $ 8.78 8.69 Income before income taxes Income taxes Net income Net income per common share (dollars) Net income per common share-assuming dilution (dollars) 40,610 $ 7.36 $ 7.28