Wiley GAAP 2020

28ASC 410 ASSET RETIREMENT AND ENVIRONMENTAL OBLIGATIONS

• Perspective and Issues
  • Overview
  • Subtopics
  • Scope and Scope Exceptions
    • ASC 410-20
    • Examples of the Scope of ASC 410-20
    • ASC 410-30
• Definitions of Terms
• ASC 410-20, ASSET RETIREMENT OBLIGATIONS
  • Concepts, Rules, and Examples
    • Asset Retirement Obligations (AROs) Requiring Recognition
  • Recognition
    • Example of Timing of Recognition
    • Example of Ongoing Additions to the Obligation
  • Initial Measurement
    • Initially Applying an Expected Present Value Method
    • Funding and Assurance Provisions
  • Subsequent Measurement of an Asset Retirement Obligation
    • Depreciation
    • Changes in the Liability
    • Changes Due to Passage of Time
    • Changes in Amounts or Timing of Cash Flows
    • Expected Present Value Increases
    • Expected Present Value Decreases
    • Rate-Regulated Entities
    • Example—Initial Measurement and Recognition
    • Example—Accounting in Subsequent Periods
    • Electronic Equipment Waste Obligations
• ASC 410-30, ENVIRONMENTAL OBLIGATIONS
  • Concepts, Rules, and Examples
  • Environmental Remediation Liabilities

PERSPECTIVE AND ISSUES

Overview

An asset retirement obligation (ARO) is a legal obligation:

• Established between two or more parties,
• Imposed by the government, or
• Arisen because of a promissory estoppel.

Activities that may result in an ARO because of legal obligations include:

• Removal of asbestos when the related asset is retired,
• Removal of transmission assets, such as transformers and wires,
• Cleanup of landfill contamination, or
• Removal of ...