Exxon Mobil Corporation and Affiliated Companies, f.k.a. Exxon Corporation and Affiliated Companies - Page 49




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          permission.  For examples of situations where certain                       
          modifications in the accrual of items under the all-events test             
          were held to constitute not “changes” in methods of accounting              
          for such items but mere “corrections” in the application to such            
          items of the all-events test of the accrual method of accounting            
          (for which corrections respondent’s permission was not required)            
          see Northern States Power Co. v. United States, 151 F.3d 876,               
          883-885 (8th Cir. 1998); Gimbel Bros., Inc. v. United States, 210           
          Ct. Cl. 17, 535 F.2d 14, 21-23 (1976); Standard Oil Co. v.                  
          Commissioner, 77 T.C. 349, 381-383 (1981).                                  
               In Ohio River Collieries Co. v. Commissioner, 77 T.C. 1369             
          (1981), we recognized that under the all-events test accrual of             
          estimated strip-mining reclamation costs as ordinary and                    
          necessary business expenses may be appropriate in the year the              
          land is disturbed, rather than in the year the reclamation work             
          is performed.  Arguably, in light of that case, Exxon’s attempted           
          modification to the accrual of estimated DRR costs from the year            
          DRR work is performed to the year in which wells are drilled                
          would qualify as a mere correction in Exxon’s method of                     
          accounting for such well-site DRR costs for which respondent’s              
          permission would not be required.  In light, however, of our                
          resolution of the next issue we need not, and we do not, decide             
          this issue.                                                                 

          Distortion of Income                                                        





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