114 T.C. No. 20 UNITED STATES TAX COURT EXXON MOBIL CORPORATION AND AFFILIATED COMPANIES, f.k.a. EXXON CORPORATION AND AFFILIATED COMPANIES, Petitioners v. COMMISSIONER OF INTERNAL REVENUE, Respondent Docket Nos. 18618-89, 18432-90. Filed May 3, 2000. Held: For the years before the Court, $204 million (reflecting petitioners’ 22-percent share of a total $928 million) in estimated dismantlement, removal, and restoration (DRR) costs relating to fieldwide oil production equipment and facilities located in the Prudhoe Bay oil field on the North Slope of Alaska is not sufficiently fixed and definite to be accruable under the all-events test of sec. 1.461- 1(a)(2), Income Tax Regs. Held, further, for the years before the Court, $24 million (reflecting petitioners’ 22-percent share of a total $111 million) in estimated DRR costs relating specifically to oil wells and to well drilling sites located in the Prudhoe Bay oil field: (1) Is sufficiently fixed, definite, and reasonably determinable to satisfy the all-events accrual test of the accrual method of accounting; (2) is not accruable as a capital cost because such accrual would constitutePage: 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
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