Interactive 2009 Annual Report (PDF 7.56 MB) - Denbury Resources ...

80 Denbury Resources Inc. 2009 Annual Report(iii) accruals related to oil and gas production and revenues, capital expenditures and lease operating expenses, (iv) theestimated costs and timing of future asset retirement obligations, (v) estimates made in the calculation of income taxesand, (vi) estimates made in determining the fair values for purchase price allocations. While management is not aware ofany significant revisions to any of its estimates, there will likely be future revisions to its estimates resulting from matterssuch as revisions in estimated oil and gas volumes, changes in ownership interests, payouts, joint venture audits,re-allocations by purchasers or pipelines, or other corrections and adjustments common in the oil and gas industry,many of which require retroactive application. These types of adjustments cannot be currently estimated and will berecorded in the period during which the adjustment occurs.ReclassificationsCertain prior period amounts have been reclassified to conform with the current year presentation. Suchreclassifications had no impact on our reported net income, current assets, total assets, current liabilities, total liabilitiesor stockholders’ equity.Recently Adopted Accounting PronouncementsFASB Accounting Standards Codification TM . In June 2009, the Financial Accounting Standards Board (“FASB”)introduced the FASC as the new source of authoritative U.S. GAAP for nongovernmental entities. The Companyapplied the new guidance to our financial statements issued for the nine months ended September 30, 2009. Thisstandard did not have any impact on the Company’s financial position or results of operations.Subsequent Events. In May 2009, the FASB issued guidance under the “Subsequent Events” topic of the FASC toestablish accounting standards for events that occur after the balance sheet date but before financial statements areissued or are available to be issued. The new guidance does not significantly change current practice but does requirecompanies to disclose the date through which subsequent events were evaluated and whether or not that date wasthe date the financial statements were issued or available for issuance. The Company adopted the new guidance uponits issuance with no resulting impact on the Company’s financial position or results of operations.Business Combinations. In December 2007, the FASB issued guidance under the “Business Combinations” topic ofthe FASC to establish principles and requirements for how an acquirer recognizes and measures in its financialstatements, the identifiable assets acquired, the liabilities assumed, any noncontrolling interest in the acquiree and thegoodwill acquired. The guidance also establishes disclosure requirements to enable the evaluation of the nature andfinancial effects of the business combination. We adopted the new guidance on January 1, 2009. While the adoptiondid not have an adoption-date impact on our financial position or results of operations, we did apply the revisedguidance to our Hastings Field and Conroe Field acquisitions during 2009.Equity Method Accounting. In November 2008, the FASB issued guidance in the “Investments – Equity Companyand Joint Ventures” topic of the FASC to clarify how the application of equity method accounting will be affectedby newly issued guidance on business combinations and noncontrolling interests in consolidated financial statements.The new guidance clarifies that an entity shall continue to use the cost accumulation model for its equity methodinvestments. It also confirms past accounting practices related to the treatment of contingent consideration andimpairment. Additionally, it requires an equity method investor to account for a share issuance by an investee as if theinvestor had sold a proportionate share of the investment. This guidance was effective January 1, 2009, appliesprospectively and did not have any impact on our financial position or results of operations.Noncontrolling Interests. In December 2007, the FASB issued guidance under “Consolidations” topic of the FASCwhich establishes accounting and reporting standards for ownership interests in subsidiaries held by parties other thanthe parent, the amount of consolidated net income attributable to the parent and to the noncontrolling interest,changes in a parent’s ownership interest, and the valuation of retained noncontrolling equity investments when asubsidiary is deconsolidated. The new guidance also establishes disclosure requirements that clearly identify anddistinguish between the interests of the parent and the interests of the noncontrolling owners. We adopted thisguidance on January 1, 2009 and, since we currently do not have any noncontrolling interests, the adoption did nothave any impact on our financial position or results of operations.Form 10-K Part IINotes to Consolidated Financial Statements