Most serious investors consider this number very important when making decisions. By this number i mean the amount of reserves. Yes, some of the methods of calculating it are a little arbitrary but it is the best information investors have as to the value of a company's reserves. Thus, it is very important.

And it is not completely arbitrary. For example the rules are the same for all oil companies at the same time. So the number is by no means random. And while the results depend on the price of oil on particular days, everyone knows the price of oil and what the key days are. So if some investors believe oil will climb back up, they can do some math and arrive with a number that better suits their view of the future.

Investors, suppliers, the taxman: everybody makes decisions on a company's balance sheet. Accounting like this is done for everything. Oil, cars, computers, cash, bonds, buildings etc. No analyst has the resources to hunt down all these numbers and even if they would, it's often quite hard to decide what a 'fair' value for a given asset should be. A lot of that information probably isn't even public.

It's also done for legal and tax reasons. If your assets lose value, you may run into insolvency (net assets < debt). Your balance sheet should reflect reality and the result can be that you have to shut down the business even though you have money in the bank.