DACF is used to reduce distortions in cash flow figures. Distortions arise from different financing methods, and the different accounting methods related to these financing methods. DACF is mainly used when there is substantial debt, large cash flows, and significant impact of tax treatment. This is not unusual in oil and gas companies. DACF smooths out the differences, so that DACF figures can be compared across companies to help assess relative performance and valuations. If companies handle exploration costs in very different ways, then an adjustment for exploration is included in the DACF calculation which is: cash flow from operations + financing costs (after tax), and sometimes + exploration expenses (before tax) +/- working capital adjustment.