Report BP Main content ONLY Assignment Example | Topics and Well Written Essays - 1500 words

Report BP Main content ONLY - Assignment Example BP was privatised in the 1980s. The United Kingdom (U.K.) and the United States (U.S.) have active and extensive stock and bond markets, and a primary purpose of financial reporting in both countries is to provide investors and creditors (i.e., suppliers of capital) with information useful for decision making. Generally accepted accounting principles (GAAP) in the U.K. and the U.S. are similar. (Deans, Bob and Peter, 2010, 56) For example, both U.K. and U.S. GAAP require providing for un-collectible accounts and depreciating fixed assets over their useful lives. Nevertheless, differences exist between U.S. GAAP and U.K. GAAP, in terms of accounting standards and financial statement format and terminology. BP uses historical cost accounting, but its income statement also reports replacement cost information about certain earnings components. BP uses the FIFO inventory valuation method. In the U.K., companies may not use the LIFO method for either tax purposes or financial reporting pu rposes. Because under LIFO the costs of the latest goods acquired are treated as the costs of the first goods sold, LIFO based cost of goods sold will approximate cost of goods sold computed on a current or replacement cost basis. ... f gross margin that reflects two components: (a) gross margin on a LIFO basis; and (b) any gains or losses realised over the period from when inventory was acquired until it was sold (referred to as holding gains/ losses or inventory profits/losses). Therefore, gross margin computed under LIFO generally will differ from gross margin computed under FIFO unless changes in inventory costs are small in amount or inventory turns over very rapidly, such that the oldest costs under FIFO approximate current costs. Following graphs describe BP's financial statements and accompanying notes. BP's financial statements, comparative balance sheets, income statements and statements of cash flows are given below. This will build on knowledge of the basic financial statements and of inventory valuation methods. SWOT Analysis on British Petroleum British Petroleum is given position of third largest energy company of the world. BP has its headquarter in the UK and it is as a multinational oil company w hich: Strengths Functions petrochemical businesses globally with the help of its set of connections of other brands and subsidiaries ( Like ARCO; ampm; Amoco and Burmah Castrol etc) Holds prominent position in local Stock Exchange and is included in FTSE 100 Index; Holds enormous amount of trade loyalty in the field of oil; Possesses well-organised management with a slogan of ‘Beyond Petroleum’ . Raised its profit up to 83% for record oil and gas prices. Weaknesses Launch of contentious commerce with the Baku-Tbilisi-Ceyhan pipeline; Rise of prices of petrol within the UK; Outburst of British Petroleum plant in Texas resulted in hundred injuries and fifteen deaths; During 2006, Immoral act of spread of 270.000 gallons of crude oil in the Alaskan tundra; Poisonous leak of methanol in the