Oil & Gas
Farm-Out — Carry Obligation Fulfilled
Recording when the carry obligation (funding the partner's share) is satisfied and the receivable is recovered from production.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Oil Revenue (Carry Recovery) | Revenue (+) | - | 2,000,000.00 |
| Carry Receivable (Recovered) | Asset (-) | 2,000,000.00 | - |
💡 Accountant's Note
When production begins, the carrier deducts the carry amount from the carry partner's production entitlement. The carry receivable is reduced and the recovered amount flows to revenue — it is effectively a pre-payment of the carry partner's future production.
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