Article Review for Deep water Horizon Oil Spill - myassignmenthelp

Question: Write about theArticle Review for Deep water Horizon Oil Spill. Answer: Introduction This report contains a case study on the Deep water Horizon Oil Spill. In this article, a deep study has been made on Deep water Horizon Oil Spill case and how BP responded to cover up all the losses which aroused due to its spill cases. Politician in gulf countries are already more inclined towards developing safety mechanism for general public. It is observed that BP had come up with various safety mechanisms after its Deep water Horizon Oil Spill. After evaluating the financial statement of BP, it is analyzed that company has been facing several losses in its business functioning due to its spill oil (Barnett 2007). It is observed that BP has to make changes in its value chain activities by adopting eco friendly mechanism instead of establishment of eco friendly system. After evaluating the whole case, it is analyzed that company had not paid penalty and charges amount imposed on its by the gulf country government. However, losses arouse from these oil spill is also not measurable which could be compensated by BP by paying penalties and fines. If BP wants to make growth in its business then it should establish various eco system and changes in its value chain activities for the betterment of the society (Redmond and Valentine, 2012). Moreover, Politician in gulf countries is also coming up with various eco friendly business policies and frameworks. In addition to this, as per the interest theory government of gulf countries had ready to lower down the imposed penalties in determined approach. BP has used these losses in its financial statement for reducing its tax amount and losses from its business functioning (White, et al, 2012). Points of Discussion The main point of discussion which have been taken in this research program is related to all the liabilities and penalties imposed on BP. In this case it is given that BP had installed several support systems to increase its business sustainability. My view point is that BP had made investment to install various eco support systems but these all are less efficient. It is analyzed that Deep Water Horizon Oil spill occurred due to less effective eco system implemented by BP in area where it was working. In addition to this, Deep Water Horizon Oil spill has not only affected its own business but also put negative impact on the people who are living their lives in the affected areas. This Deep Water Horizon Oil spill case has given clear bifurcation on all the penalties and other associated acts of BP in effective manner. This case is analyzed to identify that BP had failed to make proper level disclosure of information on its eco system services and other eco supporting system. These d isclose the proper information on eco-system services and other environmental support system. However, BP had faced several negative impacts from this disaster. It had faced $ 1107 million loss in its business functioning due to this Deep water Horizon oil spill. Apart from that, BP promised to make contribution of $ 500 million in its research and development department. The BP group had also committed to provide fund $ 360 million to six Berms in Louisiana Island Project. However, the main discussion point in this Deep Water Horizon Oil spill case is related with the business policies of BP to charge these all amount from its profit and loss account (King, et al. 2015). these reveal that BP had failed to follow complete level of accounting and financial requirements while preparing its financial statements. The escrow account opened by Bp to discharge its legal liabilities also does not contain full legal penalty amount. It had deposited only penalties amount which is certain and uncertain liabilities which are yet to be proven had not been considered. It had also resulted into business destruction of BP. It would cost around USD 12 to 47 billion. Afterward, the main discussion point could be made on the transparency of financial statement of BP. It had also not proper level of discourse to its stakeholders. BP had destruct its brand image due to its less efficient reporting frameworks in gulf countries. In the end, it would be inferred that if company want to establish its brand image again then it needs to establish an effective eco system and reporting standards in determined approach (Bodle, et al. 2016). Reflection on the Case of BP In Deep Water Horizon Oil spill case, it is given that BP had to face several legal penalties and charges due to its oil spill. Apart from that, BP had also charged all of its penalties and charges as revenue expenses which is not correct as per the international financial reporting standard. BP had charged all of its expenses as revenue expense which reduced all of its tax payment. BP should have not charged these losses from its profit and loss account but could have deducted these losses on gradual basis by appropriating these losses from the profit and loss account. Moreover, BP had also failed to make complete level of disclosure in its financial statement which had also decreased its brand image in stakeholders mind. BP in 2009 had profit of $ 6947 million which decreased by very drastic rate and resulted into loss of $ 1107 million. Apart from that, BP promised to make contribution of $ 500 million in its research and development department. The BP group had invested its funds of $ 360 million to six Berms in Louisiana Island Project. there is need to establish effective level of financial and accounting frameworks in determined approach (Gutierrez, et al. 2013). The main argument in this case is related with how BP had made disclosure of its financial and non financial information in its annual report to its stakeholders. In addition to this, accounting policies for charging loss of Deep water Oil spill had also been charged as revenue loss from the profit and loss account of company with a view to save tax and other burdens. However, BP had also set off these losses to reduce the profit of other unites as well. If BP wanted to increase its business sustainability then it should have made effective level of transparency for its non financial and financial transactions in determined approach. Conclusion This report is prepared to describe all the factors which were considered against the reporting frameworks and other eco system established by BP in response to Deep water Horizon oil Spill. Moreover, there are several shortcomings which have been disclosed in this report. BP had made several efforts to overcome all the associated problems of oil spill in gulf countries. Now in the end, it would be inferred that accountant and financial managers had not followed proper accounting and financial reporting frameworks which have resulted into non disclosure of true and fair view of financial statement of organization. Moreover, Deep water Horizon Oil spill had grasped attentions of government and regulatory authority of gulf countries which have resulted into strengthen ecological and sociological policies and increase the transparency in discloser of financial and accounting details to its stakeholders (Liu, et al. 2016). BP had made efforts to establish eco system and various social pr otection program but BP instead of establishment of these programs should indulged in avoiding these types of business practice which affect the people lives and areas where people lives. References Bodle, K.A., Bodle, K.A., Cybinski, P.J., Cybinski, P.J., Monem, R. and Monem, R., 2016. Effect of IFRS adoption on financial reporting quality: Evidence from bankruptcy prediction.Accounting Research Journal,29(3), pp.292-312. Boyd, J., 2010. Lost ecosystem goods and services as a measure of marine oil pollution damages. Resources for the Future DP 10-31, 25p Gutierrez, T., Singleton, D.R., Berry, D., Yang, T., Aitken, M.D. and Teske, A., 2013. Hydrocarbon-degrading bacteria enriched by the Deepwater Horizon oil spill identified by cultivation and DNA-SIP. The ISME journal, 7(11), p.2091. King, G.M., Kostka, J.E., Hazen, T.C. and Sobecky, P.A., 2015. 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