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BP operates off-shore oil drilling platforms including rigs in the Gulf of Mexico. On April 2010, explosions and a fire on the Deepwater Horizon rig led to the death of 11 crew members and a 200-million-gallon oil spill in the Gulf of Mexico. BP's 2010 annual report included the following description of its contingent liabilities (provision) related to this accident:
In estimating the amount of the provision, BP has determined a range of possible outcomes for Individual and Business Claims, and State and Local Claims .... BP has concluded that a reasonable range of possible outcomes for the amount of the provision on December 31, 2010, is $6 billion to$13 billion. BP believes that the provision recorded on December 31, 2010, of $9.2 billion represents a reliable best estimate from within this range of possible outcomes.
REQUIRED b. How would the accounting for this provision differ if BP prepared its financial statements in accordance with U.S. GAAP?