1.The research question & hypothesis…………………………….…3
2. Barriers & restrictions in the research process……………….…..3
3. Literature review.………………………………………...................5
4. Selected method for collecting data…………………………….....8
5. Data analysis………………………………………………............10
Conclusions & recommendations……………………….................14
References………………………..………………………………...…17
1. The research question & hypothesis
Our research question is “What is the preferred depreciation method for Property plant and equipment within the Oil and Gas sector and why from 2011-2013? The case of the listed FTSE 350 companies”. And hypothesis0 is that the companies preferred unit of production method for property plant and equipment within the Oil and Gas sector on FTSE 350. And hypothesis1 is that the companies preferred other depreciation methods instead of unit of production for property plant and equipment within the Oil and Gas sector on FTSE 350.
Members of our group choose this topic for interesting. After investigated, we found various depreciation methods that they concentrate on different circumstances respectively; especially there are some different choices of depreciation methods within the Oil and Gas sector, compared with other sectors of industry. Thus, we choose this sector to research. Furthermore, We are capable of undertaking our topic, and we already have some academic knowledge in this area. Meanwhile, This research can help us find our knowledge gap and fill it, which benefits us to improve in finance and accounting.
2. Barriers & restrictions in the research process
There are various barriers on collecting data and information. Firstly, Cairn Energy plc. did not write down any used choices of depreciation methods in annual reports, which makes researchers have to spend more time to search and read a number of resources; Collections of qualitative data also did spend too much time; and qualitative data are likely to be more ambiguous, elastic and complex, said Saunders et al (2012, p.546). As the results, analysis and understanding them needs to be sensitive to these characteristics to be meaningful, which also takes for a long period. And limit of knowledge lead to analysis of qualitative data incompletely.
Secondly, mixed case study and e-mail methods were planned to use for collection data, but there was never return e-mails from managers of companies after researchers sent e-mails to them in order to ask the reasons why they choose them. This restriction causes us had to e-mail collection methods.
According to Saunders et al (2009) states that researchers should know about access needs before starting research, but solving problems of access also are barriers due to insufficient time, lack existing contacts (Jankowicz, 2005, p.133) and getting organizational concerns.
Although this topic needs some exploratory research, in real life it is often difficult or impossible to conduct a true experiment of choosing depreciation method for students, which may be impossible to manipulate treatment (Ghauri aand Grnhaug, 2005, p.68).
Print said, “we prefer to subscribe to the view that there’s a shared common ground all right, but that it’s more like a quicksand” (1998, p.21). Due to this barriers, judging views and associating it with real life are barriers for undertaking research.
3. Literature review
IAS16 provides general standard regarding the calculation of depreciation of property, plant and equipment that should be allocated on a systematic basis over its useful life. Standard mentions three depreciation methods by name: straight line, reducing balance and the sum of the digits. (Alexander etc., 2003, p.204). Apart from mainly method, there are more methods: unit of production, revaluation or arbitrary valuation (Alexander etc., 2004, p.251), and unit of production method based on actual physical usage of the fixed asset. And once the method has been chosen, consistency is required.
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