Comments for someone elses future doctoral thesis

So apparently, one of the upsides of paying so much to go to school is that he school has enough money to pay a lot to the Professors. I’m studying accounting from the guy who literally wrote the book on accounting. So, strangely enough, I’m actually enjoying accounting. Let us not confuse enjoyment with complete understanding, but still…
So here is a little bit of accounting info: It turns out (Prof. Libby uses this expression a lot) that while a company accounting for its assets, has to report the cost price of the factories, machines, land, natural resources etc. that it uses for the running of its operations. It also has to account for their depreciated value. That means that it has to make an estimate of how long it will be able to use whatever it is and then divide the cost by that estimated number of years, and each year take that sum off of the book value.
So, when I got sick of doing accounting exercises, my mind started wandering, and sadly this is what it wandered to: How many years of useful life do oil companies estimated for their oil wells? Has this changed over the years, and if so, how has it changed over the last few years during the debate on the diminishing crude oil reserves? Have companies re-estimated? If so, have they changes the estimation to be higher or lower?
Professor Libby, despite his great accounting wisdom, didn’t know the answer but did acknowledge that was an interesting question. He also added that, from an accounting perspective, it’s interesting to note that companies who own natural resources might at times change estimates from a resource depleting itself to suddenly having value again. An example is natural gas. In the last few years, gas prices have risen enough and technology has advanced enough that it makes economic sense to go back to a field that previously was shut down, and drill again. This in some way has to be reflected in the books, despite the fact that the book value of the natural resources has already reached zero.