a. Wildcat Oil Corporation drills an exploratory well during 2016 that finds oil, but not in commercially producible quantities at current oil prices. Since proved reserves are not found, Wildcat expenses the cost of the well in 2016. Early in the next year, but after Wildcat’s financial statements have been published, the price of oil goes up so that the reserves found by the exploratory well during 2016 become commercially producible. Should the costs of the well be reinstated?

b. Assume the same situation except that the price of oil goes up early that next year before Wildcat’s financial statements are published. Should the costs of the well be reinstated in this case?