Oil & Gas
Production Sharing Contract — Government Take
Recording the government's share of production under a Production Sharing Contract (PSC).
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Government Take Expense (Profit Oil) | Expense (+) | 2,000,000.00 | - |
| Crude Oil Inventory / Revenue (Gross) | Asset/Revenue (-) | - | 2,000,000.00 |
💡 Accountant's Note
Under a PSC, the company first recovers costs ('cost oil'), then splits the remainder ('profit oil') with the government. The government's share is recorded as an expense, not a tax. The company only recognizes its own share as revenue.
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