TBS F4 - ARO Flashcards
1
Q
How do you calculate the Asset Retirement Obligation(ARO)?
A
- Total Cost X PV of $1 of (4.25% of 5 yrs)
2
Q
JE for Unrecorded Liability (ARC/ARO)
A
Debit - Asset Retirement Cost
Credit - Asset Retirement Obligation
3
Q
How do you calculate the accretion over (X) years?
A
Total cost(future value) minus PV ARO