Asset Retirement Obligation

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Asset Retirement Obligation

In accounting, a requirement that a long-term liability that must be retired in the future be recorded at its estimated, fair market value at the time of retirement instead of its value at the time the liability was acquired. This is codified in FASB No. 143.
References in periodicals archive ?
The report commissioned by the German Federal Ministry for Economic Affairs and Energy to assess the asset retirement obligations of the country s nuclear power plant (NPP) operators has found no ground for objecting to their accounting practices.
However, both an increase in asset retirement obligations (AROs) from recently acquired North Sea O&G assets, which nudged up the Group's total adjusted debt (includes operating lease commitments and AROs) to AED 89.
Capital and carry commitments and decommissioning liabilities: As investors look to enter new upstream geographies they need to give adequate consideration to asset retirement obligations that are being introduced into new agreements or renewals and their impact on the project economics, the government's take and operator's carry obligations.
18, Accounting Standard for Asset Retirement Obligations (Statement No.
7m for both the properties, subject to further post-effective date adjustments and assumption of asset retirement obligations associated with these properties.
52 billion yen on adjustment for changes of accounting standards for asset retirement obligations, said the holding company for the Mitsukoshi and Isetan department store chains.
The document clarifies environment-related disclosure requirements for stock issuers, including environmental risks, trends and uncertainties, environmental liabilities, asset retirement obligations, innovative information on environmental goals and targets, and financial and operational effects of environmental protection activities.
Updated to include new material on asset retirement obligations, asset impairment, project analysis, investment decision making, asset exchanges, and fair value reporting requirements, this comprehensive treatment of the US and international oil and gas industry serves as a classroom text, training manual and professional reference.
143 (FAS 143), Accounting for Asset Retirement Obligations, requires an entity to recognize the fair value of a liability for legal obligations associated with the retirement of a tangible long-lived asset in the period in which it is incurred if a reasonable estimate of fair value can be made.
Timing uncertainty relates to when cash outflows will be required to settle existing obligations--for example, when a company will retire facilities subject to asset retirement obligations.
In addition, FIN-47 also requires liabilities for asset retirement obligations (ARO) to be valued at fair value.
In releasing the standard, FASB noted that because existing practice concerning accounting for all obligations associated with the removal of long-lived assets was inconsistent, SFAS 143 was written with the broader intent of covering all asset retirement obligations (ARO).