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| Author: | Johnsen, T. Paxon, D. A. Rizzuto, R. J. |
| Title: | Are petroleum market values a triumph of economics over accounting? |
| Journal: | Journal of Business Finance and Accounting
1996 : MAR, VOL. 23:2, p. 243-262 |
| Index terms: | PETROLEUM INDUSTRY GAS INDUSTRY VALUATION |
| Language: | eng |
| Abstract: | In this paper the authors review the state of the debate regarding the value of accounting disclosures as compared to supplementary and proprietary data in the valuation of oil and gas companies. The authors initially review the empirical tests of Miller and Upton (1985) and Harris and Ohlson (1987). Then using their unique data base of US oil companies, they find that accounting values are not closely related to stock market values of petroleum companies. Instead, the market appears to incorporate economic estimates (implict in the Hotelling estimate, explicit in properietary data) in the valuation of oil and gas firms. There is no evidence in this research that the market reflects directly "ad hoc accounting" standardized present value disclosures. |
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