LO2 British Petroleum's income statement was prepared using IFRS is presented below (in $ millions) Group income statement For the year ended 31 December 2013 2012 Sales and other operating revenues 379,136 375,765 Earnings from joint ventures-after interest and tax 447 260 2,742 3,675 Earnings from associates-after interest and tax Interest and other income 1,677 777 13,115 6,697 Gains on sale of businesses and fixed assets 388,074 Total revenues and other income 396,217 Purchases 298,351 292,774 Production and manufacturing expenses 27,527 33,926 Production and similar taxes 7,047 8,158 Depreciation, depletion and amortization 12,687 13,510 Impairment and losses on sale of businesses and fixed assets 1,961 6,275 3,44 Exploration expense Distribution and administration expenses 1,475 13,070 13,357 (459) Fair values gain on embedded derivatives (347) Profit before interest and taxation 31,769 19,769 Finance costs 1,068 1,072 566 Net finance expense relating to pensions and other post-retirement benefits 480 Pofit before taxation 30,221 18,131 Taxation 6,880 6,463 Profit for the year 23,758 11,251 Attributable to 23,451 BP shareholders 11,017 Non-controlling interests 307 234 23,758 11,251 Earnings per share-cents Profit for the year attributable to BP shareholders Baisc 123.87 57.89 57.50 Diluted 123.12 ExxonMobil Corporation's income statement prepared using U.S. GAAP is presented below (in $ millions) CONSOLIDATED STATEMENT OF INCOME 2013 2012 (millions of dollars) 420,836 Revenues and other income 451,509 Sales and other operating revenue (I) Income from equity affiliates 13,927 15,010 Other income 3,492 14,162 438,255 Total revenues and other income 480,681 Costs and other deductions Crude oil and product purchases Production and manufacturing expenses 263,535 244,156 38,521 40,525 13,877 Selling, general and administrative expenses 12,877 Depreciation and depletion 17,182 15,888 Exploration expenses, including dry holes 1,976 1,840 Interest expense 9 327 Sales-based taxes (I) 32,409 30,589 Other taxes and duties 33,230 35,558 Total costs and other deductions 380,544 401,955 Income before income taxes 57,711 78,726 24,263 31,045 Income taxes 47,681 Net income including noncontrolling interests 33,448 Net income attributable to noncontrolling interests 868 2,801 Net income attributable to ExxonMobil 32,580 44,880 Earnings per common share (dollars) 7.37 9.70 Earnings per common share - assuming dilution (dollars) 7.37 9.70 Required: A. Are expenditures reported on BP's income statement reported by function or by nature of the expense? Be specific. Do you think that this format is more or less useful for users of the financial statements? B. On the BP income statement, what is the "earnings from associates" usually called in the U.S.? C. On ExxonMobil's income statement, are the expenses listed by function or by nature? D. Compare the performance of BP relative to ExxonMobil. Is it easy to compare the numbers from companies using IFRS to companies using U.S. GAAP? E. Does it matter that BP is using FIFO and ExxonMobil is using LIFO for inventory? The LIFO reserve de- creased by $282 million in 2013