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Capturing risks in accounting, the case of extractive industries
[La prise en compte du risque en comptabilité, le cas des industries extractives]

Author

Listed:
  • Véronique Blum

    (UGA - Université Grenoble Alpes)

  • Charlotte Krychowski

    (LITEM - Laboratoire en Innovation, Technologies, Economie et Management (EA 7363) - UEVE - Université d'Évry-Val-d'Essonne - Université Paris-Saclay - IMT-BS - Institut Mines-Télécom Business School - IMT - Institut Mines-Télécom [Paris], IMT-BS - MMS - Département Management, Marketing et Stratégie - TEM - Télécom Ecole de Management - IMT - Institut Mines-Télécom [Paris] - IMT-BS - Institut Mines-Télécom Business School - IMT - Institut Mines-Télécom [Paris])

Abstract

In their intent to define standards related to extractive activities, many accounting standard setters have addressed the following question: What estimate of future growth prospects is useful to investors in addition to balance sheet and income statement information? Our study uses the Ohlson model (1995) on a sample of 52 companies, listed over a period of 11 years (1996-2006) in order to test the relevance of 4 forward-looking vectors, as complements to the book value and net earnings : the optional values of oil reserves, the free cash flows, the capex and the crude oil price volatility. Our results suggest that a heuristic reserve value based on informational items contributing to a real option pricing is the most informative and least redundant forward-looking value. They question the usefulness of reporting of forward-looking results in the form of point estimates.

Suggested Citation

  • Véronique Blum & Charlotte Krychowski, 2023. "Capturing risks in accounting, the case of extractive industries [La prise en compte du risque en comptabilité, le cas des industries extractives]," Post-Print hal-04280973, HAL.
    • Handle: RePEc:hal:journl:hal-04280973
    Note: View the original document on HAL open archive server: https://hal.science/hal-04280973
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    References listed on IDEAS

    as
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