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principal office in Lafayette Parish, Louisiana, when it
petitioned the Court.
Petitioner is an "oil field contractor" that sells oil
pipes, leases equipment used in oil fields, and provides crews
necessary to operate the leased equipment. Petitioner's
customers are mainly large oil companies, and many of these
customers transport the leased equipment from petitioner's
location to the job site. In some cases, petitioner transports
the leased equipment itself, or it rents equipment from third
parties in order to transport the leased equipment to the job
site. Petitioner incurs expenses transporting the leased
equipment to the sites.
Petitioner enters into written contracts with its customers.
These contracts are usually provided by the customers, and the
terms of each contract vary from customer to customer. A term
that tends to be uniform throughout the contracts is that a
customer's payment is due when petitioner sends the customer an
invoice that includes all supporting documentation (e.g., job
tickets, equipment tickets, and third party charges). On a
number of occasions during the relevant years, petitioner did not
invoice a customer until after the year of completion of its
performance of the contract because it had not yet received a
third party's invoice. In those cases, petitioner postponed
accrual of the related income until the year of invoice. In the
case of pipe sales that occurred before yearend, but were not
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Last modified: May 25, 2011