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 ?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.

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Group income statement For the year ended 31 December 2013 2012 Sales and other operating revenues 379,136 375,765 447 Earnings from joint ventures-after interest and tax Earnings from associates-after interest and tax 260 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 ex penses 27,527 33,926 Production and similar taxes 7,047 8,158 Depreciation, depletion and amortization Impairment and losses on sale of businesses and fixed assets Exploration expense Distribution and administration expenses Fair values gain on embedded derivatives 13,510 12,687 1,961 6,275 3,441 1,475 13,070 13,357 (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 Profit before taxation 30,221 18,131 Тахation 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 2013 2012 Earnings per share-cents Profit for the year attributable to BP shareholders Basic Diluted 123.87 57.89 123.12 57.50