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Gold/Mining/Energy : TLM.TSE Talisman Energy

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To: Zeev Hed who wrote (321)	6/13/1999 11:17:00 PM
From: Razorbak	Read Replies (1) of 1713

Zeev: That's the way the ball bounces in the oil patch. Unfortunately, they didn't have much choice. From the 1998 Annual Report: <snip!> Notes to the Consolidated Financial Statements... 5. Property, Plant & Equipment... (page 47) In 1998, Talisman recorded impairment writedowns associated with certain North Sea assets of $245.7 million [Canadian dollars], largely the result of gas contract cancellations and low oil prices. The writedowns relate to the Southern Gas Basin and the Beatrice and Ross fields... <snip!> 16. Information for United States Readers... 4. Impairment Writedowns (pg 59) Under both US and Canadian GAAP, property, plant and equipment must be assessed for potential impairments. Under US GAAP, if the sum of the expected future cash flows (undiscounted and without interest charges) is less than the carrying amount of the asset, then an impairment loss (the amount by which the carrying amount of the asset exceeds the fair value of the asset) should be recognized. Fair value is calculated as the present value of estimated expected future cash flows. Under Canadian GAAP, the impairment loss is the difference between the carrying value of the asset and its net recoverable amount (undiscounted). The resulting differences in recorded carrying values of impaired assets further results in differences in depreciation, depletion and amortization expense in subsequent years.

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