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Institute For Oil & Gas Training
OGI-1180 New

Decommissioning & Asset Retirement Obligations: Provision Recognition Training Course

Duration
5 days
CPD hours
15
Language
English
Next date
12 Oct 2026
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Overview

Decommissioning & Asset Retirement Obligations are critical financial reporting considerations for oil and gas companies managing upstream, midstream and downstream assets with restoration, abandonment and site remediation responsibilities. The Decommissioning & Asset Retirement Obligations: Provision Recognition Training Course from Institute For Oil & Gas Training develops the financial, accounting and commercial capability required to identify obligations, measure provisions, recognise related assets and maintain accurate reporting throughout the asset lifecycle.

Oil and gas assets create long-term obligations that extend beyond production and operating activity. Wells, platforms, pipelines, terminals, processing facilities, storage infrastructure and other industrial assets can generate legal or constructive obligations to dismantle equipment, plug and abandon wells, remove infrastructure, restore sites and undertake environmental remediation. Accurate recognition and measurement of these obligations directly affect financial statements, asset values, project economics, cash flow planning and long-term financial commitments.

This course provides a practical framework for applying IAS 37 provisions to decommissioning and restoration obligations. Participants examine how a constructive and legal obligation arises, when a provision is recognised, how an abandonment cost estimate is developed and how management establishes appropriate assumptions for timing, inflation, cost escalation and discount rates.

The course also addresses the relationship between a decommissioning provision and the related decommissioning asset. Participants examine the accounting treatment of initial recognition, subsequent measurement, changes in expected cash flows and the implications of discounting and unwinding over the life of an asset. Particular attention is given to IFRIC 1 changes in existing provisions and the effect these changes have on asset carrying values and depreciation.

For oil and gas organisations, decommissioning obligations are not static accounting entries. Estimates evolve as technical conditions change, abandonment plans are refined, regulatory requirements develop, inflation assumptions change and the expected timing of expenditure moves. Financial teams therefore require a disciplined process for reviewing provisions and ensuring that accounting records remain aligned with operational and contractual realities.

Institute For Oil & Gas Training delivers this course from a corporate oil and gas perspective, connecting financial reporting requirements with asset management, engineering estimates, project economics and corporate governance. The content supports professionals who need to understand how operational decisions influence financial reporting and how financial provisions should reflect credible estimates of future obligations.

The course explores the complete accounting lifecycle of restoration obligations, from identifying the underlying obligation through initial recognition, measurement, discounting, subsequent revisions, unwinding of the discount and financial statement presentation. It also considers the interaction between finance, tax, commercial, engineering, project and asset management teams when developing and reviewing decommissioning estimates.

Participants work with realistic oil and gas scenarios involving well abandonment, facility dismantling, infrastructure removal and site restoration. These scenarios demonstrate how accounting conclusions depend on the substance of contractual commitments, legislation, established business practices, asset conditions and management expectations.

The programme is particularly relevant to organisations operating assets with long production lives and significant closure responsibilities. It provides a structured approach to strengthening provision governance, improving the quality of financial estimates and establishing stronger communication between technical and financial functions.

Objectives

  • Understand the financial reporting principles governing Decommissioning & Asset Retirement Obligations

  • Apply IAS 37 provisions to oil and gas decommissioning and restoration scenarios

  • Identify the circumstances that create a constructive and legal obligation

  • Determine when a decommissioning provision requires recognition

  • Develop a structured approach to an abandonment cost estimate

  • Understand the measurement of future decommissioning cash flows

  • Apply discounting and unwinding principles to long-term provisions

  • Understand the initial recognition and subsequent treatment of a decommissioning asset

  • Apply IFRIC 1 changes in existing provisions to revised estimates

  • Assess the effect of changes in timing, scope and expected expenditure

  • Evaluate cost escalation assumptions used in long-term decommissioning estimates

  • Understand the relationship between finance, engineering and asset management estimates

  • Strengthen governance over provision reviews and supporting documentation

  • Improve the consistency of decommissioning accounting across assets and reporting periods

  • Understand the financial statement implications of changes to restoration obligations

  • Support more robust communication between accounting, commercial and technical teams

  • Improve the quality of accounting judgements relating to long-term asset retirement obligations

  • Strengthen the audit trail supporting provision recognition and measurement

  • Apply recognised financial reporting requirements to practical oil and gas scenarios

  • Enhance corporate capability in decommissioning provision management and reporting

Training methodology

Institute For Oil & Gas Training uses a practical corporate delivery approach focused on applying financial reporting requirements to real oil and gas asset situations. The methodology connects accounting principles with operational information so participants understand not only what an accounting requirement states, but also how the requirement affects asset values, provisions and management reporting.

Case studies form a central part of the programme. Participants analyse realistic decommissioning situations involving producing fields, offshore facilities, pipelines, processing assets and other infrastructure. Each case examines the underlying obligation, expected expenditure, timing of cash flows, cost escalation assumptions and appropriate accounting treatment.

Practical scenarios are used to examine the distinction between a constructive and legal obligation. Participants assess how contractual commitments, legislation, established industry practices and public statements influence the recognition of a provision.

Calculation-based exercises address the measurement of provisions and the effect of discounting and unwinding. Participants review estimated future expenditure and assess how changes in expected timing, discount rates and cost escalation assumptions influence the reported liability.

Group exercises replicate the cross-functional nature of decommissioning accounting. Finance professionals work through scenarios requiring input from engineering, operations, commercial, legal, project management and asset teams. This approach demonstrates the importance of consistent assumptions and effective internal challenge.

IFRIC 1 changes in existing provisions are addressed through practical scenarios involving revised abandonment cost estimates, changes in expected closure dates and updated restoration obligations. Participants assess the accounting consequences of changes and their effect on the related decommissioning asset.

The programme also uses financial statement review exercises. Participants examine how provisions, related assets, depreciation and expense movements are reflected in financial reporting. This reinforces the connection between technical estimates and corporate reporting.

Real-world scenarios provide an additional layer of practical application. The focus remains on decisions encountered by oil and gas organisations rather than theoretical classroom discussion. Participants therefore develop an approach that transfers directly into financial reporting, asset accounting and provision review activities.

Organisational impact

The course strengthens the organisation's ability to recognise and measure decommissioning obligations consistently across its asset portfolio. A structured approach to provision accounting improves the quality of financial information used by management, boards, auditors and other stakeholders.

Improved understanding of IAS 37 provisions supports stronger controls over the recognition and measurement of long-term liabilities. Finance teams gain a clearer framework for assessing whether an obligation exists and whether available operational and contractual evidence supports recognition.

The programme also improves collaboration between finance and technical functions. Decommissioning provisions depend heavily on engineering assessments, asset conditions, project assumptions and expected closure strategies. Establishing common terminology and structured review processes helps finance teams challenge and interpret technical estimates more effectively.

More disciplined abandonment cost estimate processes support better financial planning. Management gains greater visibility of the assumptions driving future liabilities and can identify changes that require review before they create significant reporting issues.

Understanding discounting and unwinding strengthens the organisation's ability to monitor the movement of long-term provisions. Finance professionals can distinguish changes arising from the passage of time from changes resulting from revised estimates, helping improve management reporting and reconciliation processes.

The course also supports stronger control over the decommissioning asset. Participants understand how changes to the associated liability can affect the carrying amount of the asset and subsequent depreciation. This strengthens asset accounting controls and improves consistency between asset registers and financial statements.

A stronger understanding of IFRIC 1 changes in existing provisions helps organisations respond systematically to revised cost estimates, updated closure dates and changes in restoration obligations. This supports timely accounting reviews when operational assumptions change.

The programme contributes to improved audit readiness through stronger documentation of judgements, assumptions, calculations and review procedures. Clearer evidence supporting provisions enables finance teams to demonstrate how reported liabilities have been established and updated.

From a corporate governance perspective, the course helps organisations establish greater accountability around long-term financial obligations. Decommissioning liabilities can remain relevant for many years, making effective governance over assumptions, approvals and periodic reassessment an important component of financial control.

Personal impact

Participants develop practical expertise in accounting for decommissioning and asset retirement obligations within oil and gas operations. They gain the ability to interpret accounting requirements and connect them with operational information supplied by engineering, projects and asset management teams.

Finance professionals strengthen their ability to assess whether a constructive and legal obligation exists and understand how that assessment affects provision recognition. They also develop greater confidence in reviewing the evidence supporting management's accounting conclusions.

Participants improve their understanding of long-term provision measurement and learn how discount rates, expected timing and cost escalation assumptions influence reported liabilities. This supports more effective review of calculations prepared by internal teams or external specialists.

The course strengthens participants' ability to analyse changes in provisions over successive reporting periods. They learn to distinguish between movements caused by revised estimates, changes in timing and the unwinding of discounting.

Professionals responsible for fixed asset accounting gain a stronger understanding of the decommissioning asset and its relationship with the associated provision. This supports better management of asset values, depreciation and subsequent accounting adjustments.

Participants also improve their ability to communicate accounting requirements to non-financial colleagues. This is particularly valuable when discussing engineering assumptions, abandonment strategies, expected expenditure and asset retirement plans.

The knowledge gained supports career development across financial reporting, oil and gas accounting, controllership, asset accounting, financial planning, project finance and corporate reporting functions. It also provides a stronger foundation for professionals involved in audits, financial controls and asset lifecycle management.

Who should attend

  • Oil and Gas Accountants — To strengthen technical accounting capability for decommissioning provisions and restoration obligations.

  • Financial Reporting Managers — To improve control over recognition, measurement and disclosure of long-term asset retirement liabilities.

  • Financial Controllers — To strengthen governance over provision calculations, review procedures and reporting judgements.

  • Chief Accountants and Senior Accountants — To develop practical capability in applying IFRS requirements to oil and gas assets.

  • Asset Accounting Professionals — To understand the relationship between decommissioning liabilities and the related decommissioning asset.

  • Finance Managers — To improve oversight of long-term financial obligations and asset lifecycle accounting.

  • Project Finance Professionals — To understand how closure and restoration commitments affect project economics and financial reporting.

  • Commercial Managers — To understand the financial implications of contractual and operational decommissioning commitments.

  • Asset Managers — To improve communication with finance teams regarding asset retirement plans and future expenditure.

  • Engineering Managers — To understand how technical decommissioning assumptions influence accounting provisions.

  • Project Managers — To strengthen awareness of the financial reporting implications of closure and restoration activities.

  • Internal Auditors — To improve review of controls, assumptions and supporting evidence for decommissioning provisions.

  • External Audit Professionals — To strengthen their understanding of the accounting issues arising from oil and gas asset retirement obligations.

  • Risk and Compliance Professionals — To understand governance considerations surrounding long-term restoration liabilities.

  • Senior Finance and Accounting Leaders — To establish stronger organisational processes for managing complex decommissioning obligations.

Course outline

This module establishes the financial reporting foundations for decommissioning and asset retirement obligations. It examines how oil and gas operations create obligations to abandon, dismantle, remove, restore or remediate assets and how these obligations interact with financial reporting.

  1. IAS 37 Provisions Contingent Liabilities and Contingent Assets

    • Establishes the accounting principles for recognising provisions arising from present obligations.

    • Provides requirements for assessing whether an obligation exists and whether recognition criteria are satisfied.

    • Addresses measurement of provisions based on the best estimate of expenditure required to settle the obligation.

    • Provides the core IFRS framework for many decommissioning and restoration provisions.

    Learning Outcomes

    • Identify decommissioning obligations arising from oil and gas assets.

    • Distinguish between constructive and legal obligation circumstances.

    • Assess the conditions supporting recognition of a provision.

    • Apply IAS 37 principles to practical oil and gas scenarios.

    • Establish a structured approach to documenting provision recognition judgements.

This module focuses on measuring decommissioning provisions and developing reliable estimates of future expenditure. Participants examine the assumptions that influence the present value of restoration obligations and learn how finance teams should assess estimates supplied by operational and technical functions.

  1. IAS 37 Measurement Requirements

    • Requires provisions to reflect the best estimate of expenditure required to settle the present obligation.

    • Addresses the effect of risks and uncertainties surrounding the underlying obligation.

    • Requires discounting when the effect of the time value of money is material.

    • Provides the basis for evaluating long-term provision measurement.

    Learning Outcomes

    • Develop a structured approach to an abandonment cost estimate.

    • Understand the financial effect of cost escalation assumptions.

    • Apply discounting to long-term decommissioning cash flows.

    • Explain the effect of unwinding on provision balances.

    • Evaluate the quality and consistency of key estimation assumptions.

This module examines the accounting relationship between the recognised decommissioning liability and the associated asset. Participants explore how initial recognition affects asset values and how the accounting treatment connects the provision with the underlying oil and gas property, plant and equipment.

  1. IAS 16 Property Plant and Equipment

    • Establishes accounting requirements for property, plant and equipment.

    • Provides the framework for recognising costs that form part of an asset's cost.

    • Addresses depreciation and subsequent measurement of recognised assets.

    • Provides the relevant asset accounting framework for capitalised decommissioning and restoration costs.

    Learning Outcomes

    • Explain the relationship between a decommissioning provision and decommissioning asset.

    • Understand the initial accounting treatment for restoration obligations.

    • Assess the effect of capitalised decommissioning costs on asset values.

    • Understand the subsequent depreciation implications.

    • Strengthen reconciliation between asset records and provision records.

This module addresses one of the most important areas of decommissioning accounting: changes in existing provisions. Participants examine how revised cost estimates, changes in expected timing, alterations to discount rates and other developments affect existing liabilities and the associated decommissioning asset.

  1. IFRIC 1 Changes in Existing Decommissioning Restoration and Similar Liabilities

    • Provides guidance on accounting for changes in recognised decommissioning, restoration and similar liabilities.

    • Addresses changes arising from revised estimated cash flows and discount rates.

    • Explains how changes in liabilities affect related assets in relevant circumstances.

    • Supports consistent accounting when long-term restoration estimates are revised.

    Learning Outcomes

    • Apply IFRIC 1 to changes in existing decommissioning provisions.

    • Identify the accounting consequences of revised cost estimates.

    • Assess the effect of changed settlement dates and discount rates.

    • Understand the impact of provision changes on the decommissioning asset.

    • Analyse the resulting effect on depreciation and financial reporting.

This module brings together the accounting, operational and governance aspects of decommissioning provisions. Participants develop a structured approach to periodic review, financial reporting, documentation and communication of significant assumptions and movements.

  1. IAS 1 Presentation of Financial Statements

    • Establishes principles for presenting financial statements and communicating material financial information.

    • Supports transparent presentation of significant accounting judgements and estimation considerations.

    • Provides requirements relevant to understanding material liabilities and financial statement information.

    • Helps organisations present decommissioning-related information consistently within financial reporting.

    Learning Outcomes

    • Establish effective review procedures for decommissioning provisions.

    • Improve documentation of significant accounting judgements and assumptions.

    • Analyse movements in long-term restoration liabilities.

    • Strengthen communication between finance and technical functions.

    • Support more robust financial reporting and audit evidence.

    • Improve governance over recurring provision reassessments.

    • Apply an integrated approach to decommissioning accounting throughout the asset lifecycle.

Certificate

Attendees receive a Certificate of Completion from Institute For Oil & Gas Training upon successfully finishing the course. The certificate confirms participation in the training programme and completion of the required course attendance.

Participants are expected to attend the full course to receive the Certificate of Completion. The certificate provides a formal record of professional development in Decommissioning & Asset Retirement Obligations and provision recognition within the oil and gas financial reporting environment.

Course dates

  • Europe

    Middle East

    Asia

    Africa

    North America

    Online

    Fee: £4,200

  • Europe

    Middle East

    Asia

    Africa

    North America

    Online

    Fee: £4,200

  • Europe

    Middle East

    Asia

    Africa

    North America

    Online

    Fee: £4,200

  • Europe

    Middle East

    Asia

    Africa

    North America

    Online

    Fee: £4,200

Fees include tuition, course materials and refreshments. Need different dates or a different city? Ask about your preferred date.

Frequently asked questions

What is covered in the Decommissioning & Asset Retirement Obligations course?

The course covers provision recognition, IAS 37, constructive and legal obligations, abandonment cost estimates, discounting and unwinding, decommissioning assets, IFRIC 1 and restoration obligations.

Who is this course designed for?

The programme is designed for oil and gas finance, accounting, financial reporting, asset accounting, project finance, engineering, commercial, audit and asset management professionals.

How is the course delivered?

Institute For Oil & Gas Training uses practical case studies, group exercises, financial scenarios, provision calculations and real-world oil and gas examples to connect accounting requirements with operational decisions.

Does the course cover IFRIC 1?

Yes. The course includes a dedicated module on IFRIC 1 changes in existing provisions, covering revised cost estimates, changes in timing, discount rates, decommissioning assets and related depreciation effects.

What certificate do attendees receive?

Attendees receive a Certificate of Completion from Institute For Oil & Gas Training after finishing the course and meeting the required attendance requirement.

Next: 12 Oct 2026

4 dates available

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