2017 Louisiana Tax Commission

Slides:

Advertisements

Similar presentations

Financial Management F OR A S MALL B USINESS. FINANCIAL MANAGEMENT 2 Welcome 1. Agenda 2. Ground Rules 3. Introductions.

Advertisements

William F. Bentz1 Session 11 - Interest Cost. William F. Bentz2 Interest A.Interest is the compensation that must be paid by a borrower for the use of.

CFA® Level I - Financial Reporting and Analysis Financial Statement Analysis: Applications 1.

On Leasing Adapted from Fundamentals of Corporate Finance RWJR, Fourth Canadian Edition.

© 2005 The McGraw-Hill Companies, Inc., All Rights Reserved McGraw-Hill/Irwin Slide 1 CHAPTER TEN VALUATION OF INCOME PROPERTIES: APPRAISAL AND THE MARKET.

Risk, Return, and Discount Rates Capital Market History The Risk/Return Relation Applications to Corporate Finance.

Risk, Return, and Discount Rates Capital Market History The Risk/Return Relation Application to Corporate Finance.

Risk, Return, and Discount Rates Capital Market History The Risk/Return Relation Applications to Corporate Finance.

Unit 3 - Cash Flow Forecasting

(c) 2001 Contemporary Engineering Economics 1 Chapter 11 Corporate Income Taxes Income tax rates Average vs. Marginal tax rates Gains taxes Income tax.

The Camp Audit “Keep your friends close and your auditor closer”

The FASB’s Conceptual Framework of Accounting

Oil & Gas Underwriting Analyzing the Return Potential.

Business Risk and Business Environment Fixed assets are often the large category of assets Because there is typically limited activity in fixed assets.

IMPAIRMENT OF ASSETS. DEFINITIONS NOT SAME IAS 36 was reissued in March 2004 and applies to goodwill and intangible assets acquired in business combinations.

Leasing Chapter 27 McGraw-Hill/Irwin

VALUATION BY INCOME CAPITALIZATION LEARNING OBJECTIVES Explain the difference between appraisal and investment analysis. Estimate the NOI in a reconstructed.

©2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publically accessible website, in whole or in part.

Financial Statements 2 Lecture 3

FINANCIAL SERVICES… Presented by: Ruchika Sharma.

Property, Plant, and Equipment

Valuation Program USMSS Richard Flom, CPA/ABV/CFF, CVA.

Today’s Goal Equip and inspire you to participate more fully in the Investment Club Evaluate companies for Stock Reports –Post reports on the website Valuation.

Chapter 19 Investment Decisions: NPV and IRR McGraw-Hill/IrwinCopyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.

CHAPTER 9 LONG TERM ASSETS I: PROPERTY, PLANT AND EQUIPMENT.

1 Ch 3: Forecasting: Techniques and Routes. 2 Study objectives After studying this chapter the reader should be able to: Evaluate the suitability of several.

1 Ch 14 Property Investment Analysis Capital Budgeting Techniques Applied to Investments In Land And Buildings.

1 Ch 3: Forecasting: Techniques and Routes. 2 Study objectives After studying this chapter the reader should be able to: Evaluate the suitability of several.

14 Long-Term Liabilities: Bonds and Notes Accounting 26e C H A P T E R

Chapter 5: Postulates, Principles and Concepts

Conceptual Framework Elements Recognition & Measurement Concepts Recognition & Measurement Concepts Assumptions, Principles & Concepts Assumptions, Principles.

9 Differential Analysis and Product Pricing Managerial Accounting 13e

McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

Primary Objective of Financial Reporting Invest?? Borrow $$?? Sell stocks or bonds?? Start new business?? Loan $$?? Extend credit $$?? LO1 Provide information.

Corporate Income Taxes

THE KAWARTHA FAMILY BUSINESS GROUP SUCCESSION PLANNING – WHAT IS OUR BUSINESS WORTH Presented by: William R. Blair, CA.CBV, Partner McColl Turner LLP,

US GAAP Generally Accepted Accounting Principles, US GAAP or simply GAAP are terms for the generally accepted accounting principles and rules used in the.

Needles Powers Crosson Financial and Managerial Accounting 10e Capital Investment Analysis 24 C H A P T E R © human/iStockphoto ©2014 Cengage Learning.

F9 Financial Management. 2 Designed to give you the knowledge and application of: Section F: Estimating the cost of equity F1. Sources of finance and.

 Venture Capital and Startups. What is VC?  Money provided by investors to startup firms and small businesses with perceived long-term growth potential.

Franklin Public Schools Audit Presentation For the Year Ended August 31, 2012 DANA F. COLE & COMPANY, LLP CERTIFIED PUBLIC ACCOUNTANTS.

Chapter 4 Measurement PowerPoint Presentation by Matthew Tilling ©2012 John Wiley & Sons Australia Ltd.

1 Rebuttal to the Louisiana Assessors’ Association’s Proposed Revisions to 2011 LTC Rules and Regulations Chapter 13 – Pipelines (local assessed) by Louisiana.

1 Rebuttal to the Louisiana Assessors’ Association’s Proposed Revisions to 2011 LTC Rules and Regulations Chapter 9 – Oil and Gas Properties by Louisiana.

Copyright © 2006, The McGraw-Hill Companies, Inc.McGraw-Hill/Irwin BNFO 621: Business and Entrepreneurship : ACCOUNTING Roxanne M. Spindle Associate Professor.

1 Outline of Recommendations to LTC 2010 Rules and Regulations – Chapters 9 and 13 June 23, 2009 Presented by Bob Adair Chairman, Property Tax Committee.

Business Intelligence Energy, Resources and Utilities.

Indigo Presentation to the Louisiana Tax Commission August 10, 2016

Investment returns II: From earnings to time-weighted cash flows

Presentation to the Louisiana Tax Commission 2011 Rules and Regulations Chapter 9 – Oil and Gas Properties by Louisiana Oil and Gas Association and Louisiana.

Cash Flow Statement This module provides an introduction to the cash flow statement, one of the essential financial statements. We’ll show how to create.

Chapter 7 Cash Flow Statements.

Generally Accepted Accounting Principles (GAAP)

Presented by the Louisiana Mid-Continent Oil & Gas Association

Louisiana Tax Commission

Investment returns II: From earnings to time-weighted cash flows

Financial Statement Analysis

Capital Investment Evaluation of the Drill Purchase

HIGHLIGHTS OF CHAPTER 11: Operational Assets: Utilization & Impairment

Chapter 25 LTC Rules “Valuing Hydrocarbon Storage Facilities”

Presentation to the Louisiana Tax Commission 2011 Rules and Regulations Chapter 9 – Oil and Gas Properties by Louisiana Oil and Gas Association and Louisiana.

IAS 16 Property Plant & Equipment

Presentation to the Louisiana Tax Commission 2011 Rules and Regulations Chapter 13 – Pipelines (local assessed) by Louisiana Oil and Gas Association.

Petroleum Accounting.

Repository for all documents:

Accounting and Reporting on a

CAPITAL ACCOUNTS 704(b) & MINIMUM GAIN

Example Exercise 2 Two Methods Cash Flows from Operating Activities

The Statement of Cash Flow & Valuation Cash Flow

Presentation transcript:

2017 Louisiana Tax Commission Rebuttal to the Proposal Submitted by the Louisiana Assessors Association Presented by LOGA / LMOGA August 10, 2016

Opening Comments The Louisiana Oil & Gas Association and the Louisiana Mid Continent Oil & Gas Association (LOGA/LMOGA) have reviewed the proposal submitted by the Louisiana Assessors Association (LAA). The significant areas of concern are detailed in this presentation. For ease of review by the Louisiana Tax Commission (LTC), the order of the rebuttal matches that of the LAA proposal. While considering the LAA proposal, the main point of focus was on whether or not the changes proposed did anything to move closer to fair market value for the wells and surface equipment. LOUISIANA OIL & GAS ASSOCIATION

Reasonable Expectations of Ad Valorem Taxes LOUISIANA OIL & GAS ASSOCIATION

Cost Approach Assumes active participants in the market place equate fair market value to the cost of developing the asset. The oil and gas market does not consider the cost to develop (drill an oil or gas well) to the fair market value. Example -Estimated $3,000,000 Drilling Cost Dry hole- No market for this property. The operator would not introduce this property into the market and would plug and abandoned the well Producing property Value of the property if introduced into the market will be derived from the estimated future income stream from the production of the oil and gas reserves.

Income Approach Oil and Gas properties are owned & developed for the future income stream derived from the sale of the produced oil and gas Discounted Cash Flow- projection of future income from oil and gas property Used by active participants in the oil and gas market to value their own assets as wells as prospective properties Acquisitions and Divestitures Internal investment decisions Allows appraiser or investor the ability to adjust each parameter for a particular property. Operating expenses Production profiles Lease agreements Gathering and Transportation contracts

LOUISIANA OIL & GAS ASSOCIATION

LOUISIANA OIL & GAS ASSOCIATION

LOUISIANA OIL & GAS ASSOCIATION

LOUISIANA OIL & GAS ASSOCIATION

LOUISIANA OIL & GAS ASSOCIATION

LOUISIANA OIL & GAS ASSOCIATION

LOUISIANA OIL & GAS ASSOCIATION

LOUISIANA OIL & GAS ASSOCIATION

LOUISIANA OIL & GAS ASSOCIATION

LOUISIANA OIL & GAS ASSOCIATION

LOUISIANA OIL & GAS ASSOCIATION

LOUISIANA OIL & GAS ASSOCIATION

LOUISIANA OIL & GAS ASSOCIATION

LOUISIANA OIL & GAS ASSOCIATION

LOUISIANA OIL & GAS ASSOCIATION

LOUISIANA OIL & GAS ASSOCIATION

LOUISIANA OIL & GAS ASSOCIATION

LOUISIANA OIL & GAS ASSOCIATION

LOUISIANA OIL & GAS ASSOCIATION

Fair Market Value and Common Sense Common Sense – Dictionary.com, defines common sense as sound practical judgment that is independent of specialized knowledge, training, or the like; normal native intelligence. While the concept of common sense is familiar to us, it sometimes gets lost in complicated discussions or debates. We should never lose sight that the end result of all the calculations and analysis of any assessment should make common sense, at the very least, to someone in the business or someone familiar with the business involved. LOUISIANA OIL & GAS ASSOCIATION

Production Source: LDNR Oil/Gas Production by District for a Year

Stacked or Idle Equipment

Stacked or Idle Equipment

Stacked or Idle Equipment

Stacked or Idle Equipment

Summary Let us restate something very important; LOGA/LMOGA, and the industry as a whole, fully appreciates the importance of the ad valorem tax dollars that fund the parishes and schools across Louisiana. Member companies have been historically and will continue to be good corporate citizens and support the local communities were they operate. The harsh reality at this point in time is that the basis of assessment is fair market value and those values have dropped significantly since 2015 and continue to fall. The LAA proposal for 2017 rules does nothing to move the assessments closer to fair market value. The proposal dramatically increases values in a time when there is absolutely no justification at all. LOUISIANA OIL & GAS ASSOCIATION