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1.1 Theoretical arguments for Successful Efforts method: The successful efforts method is conservative and also conforms to what constitutes an "asset", which is only those oil reservoirs that provide sufficient quantities of hydrocarbons, and therefore provide the company with a future economic benefit, are shown in the balance sheet (IASC, 2004: 81). The IASC (2004) Framework paragraph 49, defines an asset as; a resource controlled by the enterprise as a result of past events and from which future economic benefits are expected to flow to the enterprise (IASC, 2004: 81). Unsuccessful wells have little or no commercial value and should not be included as assets in the balance sheet. It is also argued that in case of a conflict between the principles of conservatism/prudence and matching, then conservatism takes precedence (ACCA, 2011:51). However, recent pronouncements by IASB have replaced the concept of prudence with neutrality because the requirement to be prudent would lead to bias in the preparation of financial statements. It reflects management's success or failures in its efforts to find new reserves and the cost of finding those reserves. The quantity of reserves added can be assessed in light of the exploration costs which have been capitalized and those that have been charged to expense in the two accounting periods (IASC, 2000: 12)