Share price falls pressure asset valuations

The underperformance of oil and gas stocks will lead auditors to closely examine goodwill and impairment testing calculations

Sustained drops in oil and gas companies’ share prices during 2019 and beyond means that the valuation of assets on firms’ balance sheets could be more closely scrutinised by auditors and regulators, warns advisory firm Opportune. In the final three quarters of 2019, the S&P oil & gas equipment & services select industry index decreased by c.27pc and the S&P oil & gas exploration & production select industry index fell by c.23pc, although both experienced a partial rebound towards the end of the year. Private oil and gas firms are also impacted by these reductions, as the value placed by the market on similar assets owned by their listed peers are used as a guide for