Capital Market Analysis of Reserve Recognition Accounting.

This paper conducts a capital market analysis of the oil and gas accounting method, "Reserve Recognition Accounting" (RRA). The Securities and Exchange Commission (SEC) first proposed RRA in Accounting Series Release No. 253 (ASR 253), issued in August 1978. In ASR 253, the Commission noted that "development of an accounting method based on a valuation of proved oil and gas reserves would provide significant useful information." To this end, the Commission required oil and gas firms to disclose RRA data as a supplementary item to their financial statements. [ABSTRACT FROM AUTHOR]