{"schema_version":2,"canonical_url":"https://asc.understandingaccounting.org/asc/360/932/#40-derecognition","source":"FASB Accounting Standards Codification, Basic View","usage":"Study and research edition. Verify current requirements with the official source. Summaries, enrichment, and tags are machine-generated study aids. Paragraph html preserves source markup; snippet is abbreviated. Pending content is not necessarily effective.","topic":"360","topic_title":"Property, Plant, and Equipment","subtopic":"360-932","subtopic_title":"Extractive Activities—Oil and Gas","section":{"number":"40","label":"40 Derecognition","anchor":"40-derecognition","is_sec":false,"groups":[{"block":null,"heading":"Surrender or Abandonment of Properties","paragraphs":[{"citation":"360-932-40-1","para":"40-1","html":"
When an unproved property is surrendered, abandoned, or otherwise deemed worthless, capitalized acquisition costs relating thereto shall be charged against the related allowance for impairment to the extent an allowance has been provided; if the allowance previously provided is inadequate, a loss shall be recognized (see Topic 410 for asset retirement obligations).
","snippet":"When an unproved property is surrendered, abandoned, or otherwise deemed worthless, capitalized acquisition costs relating thereto shall be charged against the related allowance for impairment to the extent an allowance …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:6f2e8a43763ab9d40cc0c33cfc2cddcc029bcef168a8594e0b1ac583caf65e23","downloaded_from":"2026-09-10T00:09:06.510Z","last_downloaded_at":"2026-09-10T00:09:06.510Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477487","source_sha256":"6e8930bed4e5aff9dd4108e946c53133f6fa5dbd3cb68763d973cffacdcdb5af"}},{"citation":"360-932-40-2","para":"40-2","html":"
If a well has not found proved reserves, the capitalized costs of drilling the well, net of any salvage value, shall be charged to expense. The costs of an exploratory well or exploratory-type stratigraphic test well shall be charged to expense if the well is determined not to have found proved reserves.
","snippet":"If a well has not found proved reserves, the capitalized costs of drilling the well, net of any salvage value, shall be charged to expense. The costs of an exploratory well or exploratory-type stratigraphic test well sha…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:258aa4c8ad4f466b07c6bd7d09d09c994e7bd131aef30af3cb41928ef16c5554","downloaded_from":"2026-09-10T00:09:06.510Z","last_downloaded_at":"2026-09-10T00:09:06.510Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477487","source_sha256":"6e8930bed4e5aff9dd4108e946c53133f6fa5dbd3cb68763d973cffacdcdb5af"}},{"citation":"360-932-40-3","para":"40-3","html":"
Normally, no gain or loss shall be recognized if only an individual well or individual item of equipment is abandoned or retired or if only a single lease or other part of a group of proved properties constituting the amortization base is abandoned or retired as long as the remainder of the property or group of properties continues to produce oil or gas. Instead, the asset being abandoned or retired shall be deemed to be fully amortized, and its cost shall be charged to accumulated depreciation, depletion, or amortization. When the last well on an individual property (if that is the amortization base) or group of properties (if amortization is determined on the basis of an aggregation of properties with a common geological structure) ceases to produce and the entire property or property group is abandoned, gain or loss shall be recognized. Occasionally, the partial abandonment or retirement of a proved property or group of proved properties or the abandonment or retirement of wells or related equipment or facilities may result from a catastrophic event or other major abnormality. In those cases, a loss shall be recognized at the time of abandonment or retirement.
","snippet":"Normally, no gain or loss shall be recognized if only an individual well or individual item of equipment is abandoned or retired or if only a single lease or other part of a group of proved properties constituting the am…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:3a8672fc0a0d0c91acba383b0be82a814efff0b25e23c2ad670e07b1c917572f","downloaded_from":"2026-09-10T00:09:06.510Z","last_downloaded_at":"2026-09-10T00:09:06.510Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477487","source_sha256":"6e8930bed4e5aff9dd4108e946c53133f6fa5dbd3cb68763d973cffacdcdb5af"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e9573884c22e1f7af0bc4cd2124d688904db9c202e45d31235b1935307891cab","downloaded_from":"2026-09-10T00:09:06.510Z","last_downloaded_at":"2026-09-10T00:09:06.510Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477487","source_sha256":"6e8930bed4e5aff9dd4108e946c53133f6fa5dbd3cb68763d973cffacdcdb5af"}},{"block":null,"heading":"Mineral Property Conveyances and Related Transactions","paragraphs":[{"citation":"360-932-40-4","para":"40-4","html":"
Mineral interests in properties are frequently conveyed to others for a variety of reasons, including the desire to spread risks, to obtain financing, to improve operating efficiency, and to achieve tax benefits. Conveyances of those interests may involve the transfer of all or a part of the rights and responsibilities of operating a property (operating interest). The transferor may or may not retain an interest in the oil and gas produced that is free of the responsibilities and costs of operating the property (a nonoperating interest). A transaction may, on the other hand, involve the transfer of a nonoperating interest to another party and retention of the operating interest.
","snippet":"Mineral interests in properties are frequently conveyed to others for a variety of reasons, including the desire to spread risks, to obtain financing, to improve operating efficiency, and to achieve tax benefits. Conveya…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:7e05df3bf07323ba6923fab8ee42638e58a1ef521ae3fe5847d4ef0188e66fc4","downloaded_from":"2026-09-10T00:09:06.510Z","last_downloaded_at":"2026-09-10T00:09:06.510Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477487","source_sha256":"6e8930bed4e5aff9dd4108e946c53133f6fa5dbd3cb68763d973cffacdcdb5af"}},{"citation":"360-932-40-5","para":"40-5","html":"
Implementation guidance for different types of conveyances can be found in paragraphs
932-360-55-2 through 55-14
.
","snippet":"Implementation guidance for different types of conveyances can be found in paragraphs 932-360-55-2 through 55-14.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e46335fe37d509a3759f070f8cb9ed248698772ab1d682aee59c6005b5973444","downloaded_from":"2026-09-10T00:09:06.510Z","last_downloaded_at":"2026-09-10T00:09:06.510Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477487","source_sha256":"6e8930bed4e5aff9dd4108e946c53133f6fa5dbd3cb68763d973cffacdcdb5af"}},{"citation":"360-932-40-6","para":"40-6","html":"
Certain conveyance transactions are in substance borrowings repayable in cash or its equivalent and shall be accounted for as borrowings (see paragraph 932-470-25-1).
","snippet":"Certain conveyance transactions are in substance borrowings repayable in cash or its equivalent and shall be accounted for as borrowings (see paragraph 932-470-25-1).","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:f1ab4e2251d47c47c60807863134aa5651d688b9ede64df0377911263e6b5ade","downloaded_from":"2026-09-10T00:09:06.510Z","last_downloaded_at":"2026-09-10T00:09:06.510Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477487","source_sha256":"6e8930bed4e5aff9dd4108e946c53133f6fa5dbd3cb68763d973cffacdcdb5af"}},{"citation":"360-932-40-7","para":"40-7","html":"
In a pooling of assets in a joint undertaking intended to find, develop, or produce oil or gas from a particular property or group of properties, gain or loss shall not be recognized at the time of the conveyance.
","snippet":"In a pooling of assets in a joint undertaking intended to find, develop, or produce oil or gas from a particular property or group of properties, gain or loss shall not be recognized at the time of the conveyance.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:f7e1fdf9b5cd67c0e7bc81cf488d8c40713728c699824706792179ed68c52350","downloaded_from":"2026-09-10T00:09:06.510Z","last_downloaded_at":"2026-09-10T00:09:06.510Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477487","source_sha256":"6e8930bed4e5aff9dd4108e946c53133f6fa5dbd3cb68763d973cffacdcdb5af"}},{"citation":"360-932-40-8","para":"40-8","html":"
In both of the following types of conveyances, gain shall not be recognized at the time of the conveyance (see paragraphs
932-360-55-2 through 55-8
):
  1. a
    A part of an interest owned is sold and substantial uncertainty exists about recovery of the costs applicable to the retained interest.
  2. b
    A part of an interest owned is sold and the seller has a substantial obligation for future performance, such as an obligation to drill a well or to operate the property without proportional reimbursement for that portion of the drilling or operating costs applicable to the interest sold.
","snippet":"In both of the following types of conveyances, gain shall not be recognized at the time of the conveyance (see paragraphs 932-360-55-2 through 55-8):\n(a) A part of an interest owned is sold and substantial uncertainty ex…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:cbd58e71cbcde7d02482084d5ce2de76d11998712c0492f137d706f4d590ef67","downloaded_from":"2026-09-10T00:09:06.510Z","last_downloaded_at":"2026-09-10T00:09:06.510Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477487","source_sha256":"6e8930bed4e5aff9dd4108e946c53133f6fa5dbd3cb68763d973cffacdcdb5af"}},{"citation":"360-932-40-9","para":"40-9","html":"
If a conveyance is not one of the types described in paragraphs
932-360-40-7 through 40-8
, gain or loss shall be recognized unless there are other aspects of the transaction that would prohibit such recognition under accounting principles applicable to entities in general (see paragraphs
932-360-55-8 through 55-14
).
","snippet":"If a conveyance is not one of the types described in paragraphs 932-360-40-7 through 40-8, gain or loss shall be recognized unless there are other aspects of the transaction that would prohibit such recognition under acc…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:9eb565ce77195336a13f7c9326a529c1b94a25f122bfd09bd38141a3e15a5114","downloaded_from":"2026-09-10T00:09:06.510Z","last_downloaded_at":"2026-09-10T00:09:06.510Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477487","source_sha256":"6e8930bed4e5aff9dd4108e946c53133f6fa5dbd3cb68763d973cffacdcdb5af"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:82afa5433f64b63ae8445f665ee8b929f7d237f5ac548990301396316ed41b99","downloaded_from":"2026-09-10T00:09:06.510Z","last_downloaded_at":"2026-09-10T00:09:06.510Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477487","source_sha256":"6e8930bed4e5aff9dd4108e946c53133f6fa5dbd3cb68763d973cffacdcdb5af"}},{"block":null,"heading":"Completed Exploratory Well Information Available after Balance Sheet Date","paragraphs":[{"citation":"360-932-40-10","para":"40-10","html":"
If an exploratory well or exploratory-type stratigraphic test well is in progress at the end of a period and the well is determined not to have found proved reserves before the financial statements for that period are issued or are available to be issued (as discussed in Section 855-10-25), the costs incurred through the end of the period, net of any salvage value, shall be charged to expense for that period. Previously issued financial statements shall not be retroactively restated.
","snippet":"If an exploratory well or exploratory-type stratigraphic test well is in progress at the end of a period and the well is determined not to have found proved reserves before the financial statements for that period are is…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:f1b65677e52b7b7584878a16ee456729c743d039af5aafd4910e14061d63b52d","downloaded_from":"2026-09-10T00:09:06.510Z","last_downloaded_at":"2026-09-10T00:09:06.510Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477487","source_sha256":"6e8930bed4e5aff9dd4108e946c53133f6fa5dbd3cb68763d973cffacdcdb5af"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:24a45fef0f86572e137da27fa0f237bd4ec1693e1db8b49ed3aa1a5b829c7eec","downloaded_from":"2026-09-10T00:09:06.510Z","last_downloaded_at":"2026-09-10T00:09:06.510Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477487","source_sha256":"6e8930bed4e5aff9dd4108e946c53133f6fa5dbd3cb68763d973cffacdcdb5af"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:cbd33576fc4108dbfe504cd1419c399ebceec3ec53363e1694fb4281f682d434","downloaded_from":"2026-09-10T00:09:06.510Z","last_downloaded_at":"2026-09-10T00:09:06.510Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477487","source_sha256":"6e8930bed4e5aff9dd4108e946c53133f6fa5dbd3cb68763d973cffacdcdb5af"}},"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:cbd33576fc4108dbfe504cd1419c399ebceec3ec53363e1694fb4281f682d434","downloaded_from":"2026-09-10T00:09:06.510Z","last_downloaded_at":"2026-09-10T00:09:06.510Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477487","source_sha256":"6e8930bed4e5aff9dd4108e946c53133f6fa5dbd3cb68763d973cffacdcdb5af"}}