Accounting & Bookkeeping ยท KBLI 19200

Precision Refinery Accounting

Process costing, inventory valuation, and component depreciation for oil refineries

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What usually goes wrong

  • Joint Product Costing

    One barrel of crude produces multiple products (gasoline, diesel, jet fuel, LPG) requiring fair joint cost allocation.

  • Crude Inventory Volatility

    ICP price fluctuations cause significant inventory value adjustments each period.

  • Turnaround Maintenance

    Major refinery shutdowns every 3-5 years costing $50-200M must be capitalized and amortized.

What we do

  1. 01

    Joint Product Process Costing

    Joint cost allocation using sales value at split-off or physical units method.

    • Accurate per-product COGS
    • Clear margin visibility
    • Optimal production decisions
  2. 02

    Inventory Valuation

    Lower of cost or NRV valuation updated each period.

    • Fair inventory value
    • Timely write-downs
  3. 03

    Turnaround Accounting

    Capitalization as separate component amortized over interval to next turnaround.

    • No expense spike
    • Fair asset value

Related regulations

  • PSAK 14

    Inventories

    Valuation of crude oil, intermediate, and finished product inventory

  • PSAK 16

    Fixed Assets

    Refinery accounting with component depreciation for furnaces, distillation columns, catalysts

  • PSAK 57

    Provisions

    Recognition of refinery decommissioning and environmental remediation obligations

If the tax office starts asking questions

The team that keeps your books and files your taxes also stays with you through an SP2DK, an audit, an objection and an appeal.

How we handle tax disputes

Frequently Asked Questions

How is joint cost allocated in refineries?

Joint costs (crude + processing) are allocated using: (1) Sales value at split-off, (2) Physical units. Low-value by-products are recorded at NRV as a reduction of joint cost.

What is component depreciation for refineries?

Refinery components have different useful lives: furnace (15-20 yrs), distillation column (20-25 yrs), catalyst (2-5 yrs), heat exchanger (10-15 yrs). PSAK 16 recommends separate depreciation per significant component.

How do accounting services improve operating cost efficiency?

Accurate, timely financial reports help you spot cost leakage, monitor margins by product or service, and make data-based decisions.

Can financial reports be accessed in real time?

Yes. We use cloud accounting systems so you can monitor cash flow, profit and loss, and business performance from anywhere.

How do you ensure reports are ready for external audits or banks?

Reports are prepared with clear documentation and traceable transaction data.

Related Industries

Tell us about your business

Send your line of business, rough annual turnover, and what is going wrong. We reply on WhatsApp.

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