Research Paper on:
An Accounting Case Study; Costing and NPV

Unformatted Sample Text from the Research Paper:
In the case provided by the student there is a project of 22 vertical oil wells to be developed in a single area where it appears there are no complicating  factors. In reality, the figures gained would be true costing figures, however to demonstrate how a case such as this may be tackled, fictitious figures will be used to indicate  the methodology rather than the real cost. It is also important to understand that the paper is written from an accounting perspective, therefore the elements included in the budgets may  have substantial omissions or inclusions that are not required. The method used is still valid and the contents can then be amended to account for these omissions or errors in  content. The development of any project will take investment, This investment ma be in both the physical structures but also in the exploration and development or survey costs. Where  surveys are undertaken and no action is taken these become operating cots and enter the profit and loss accent, as there is not follow up project to which they van  be attached. However where a project follows, it is possible to capitalise all the costs associated with getting the project up and running. Therefore the preparation and legal costs may  also be included in the capital cost, increasing the level of the asset shown on the balance sheet, and also increasing the way in which the depreciation takes place. This  capitalisation and then depreciation may be seen as complying with the matching concept, matching the costs of development to the benefits that is brings to the company. Therefore, when looking  at the capital costs were need not only to consider the actual building, but also the other costs that are incurred. The basis for this paper will assume the following