Why The $17.5 Billion Write-Down Is Just The Beginning For BP

BP, the British oil company, announced this week it would reduce the value of its oil and gas assets by $17.5 billion. Even though this represents a large potential asset write down, an accounting change such as this one does not take even one cent out of the corporation’s considerable cash reserves. This is simply a change in accounting assumptions reflecting that global demand for energy products has declined significantly due to the current pandemic and the rate at which product demand returns to normal remains unclear. BP’s CEO,…