Analysis of Revenues
Revenue Recognition Accounting Policy
Revenues associated with the sales of crude oil, bitumen, natural gas, liquified natural gas (LNG), natural gas liquids and other items are recognized at the point in time when the customer obtains control of the asset. In evaluating when a customer has control of the asset, ConocoPhillips primarily considers whether the transfer of legal title and physical delivery has occurred, whether the customer has significant risks and rewards of ownership, and whether the customer has accepted delivery and a right to payment exists. These products are typically sold at prevailing market prices. ConocoPhillips allocates variable market-based consideration to deliveries (performance obligations) in the current period as that consideration relates specifically to the efforts to transfer control of current period deliveries to the customer and represents the amount ConocoPhillips expects to be entitled to in exchange for the related products. Payment is typically due within 30 days or less.
Revenues associated with transactions commonly called buy/sell contracts, in which the purchase and sale of inventory with the same counterparty are entered into “in contemplation” of one another, are combined and reported net (i.e., on the same income statement line).
Source: 10-K (filing date: 2019-02-19).
Revenues as Reported
ConocoPhillips, Income Statement, Revenues
US$ in millions
|12 months ended||Dec 31, 2018||Dec 31, 2017||Dec 31, 2016||Dec 31, 2015||Dec 31, 2014|
|Natural gas liquids|
|Consolidated sales and other operating revenues|
|Consolidated sales and other operating revenues||Amount of revenue recognized from goods sold, services rendered, insurance premiums, or other activities that constitute an earning process. Includes, but is not limited to, investment and interest income before deduction of interest expense when recognized as a component of revenue, and sales and trading gain (loss).||ConocoPhillips’s consolidated sales and other operating revenues increased from 2016 to 2017 and from 2017 to 2018.|