British Petroleum’s income statement was prepared using IFRS 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 “earnings from associates” usually called in the United States?
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.

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Sales and other operating revenues Earnings from joint ventures after interest and tax Earnings from associates after interest and tax Interest and other income Gains on sale of businesses and fixed assets Total revenues and other income Purchases Production and manufacturing expenses Production and similar taxes Depreciation, depletion and amortization Impairment and losses on sale of businesses and fixed assets Exploration expense Distribution and administration expenses Group income statement for the year ended 31 December Fair values gain on embedded derivatives Profit before interest and taxation Finance costs Net finance expense relating to pensions and other post-retirement benefits Profit before taxation Taxation Profit for the year Attributable to BP shareholders Non-controlling interests Earnings per share-cents Profit for the year attributable to BP shareholders Basic Diluted 2013 379,136 447 2,742 777 13,115 396,217 298,351 27,527 7,047 13,510 1,961 3,441 13,070 (459) 31,769 1,068 480 30,221 6,463 23,758 23,451 307 23,758 123.87 123.12 2012 375,765 260 3,675 1,677 6,697 388,074 292,774 33,926 8,158 12,687 6,275 1,475 13,357 (347) 19,769 1,072 566 18,131 6,880 11,251 11,017 234 11,251 57.89 57.50