F10: Asset Retirement Obligations Flashcards Preview

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Flashcards in F10: Asset Retirement Obligations Deck (4)
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1

What is an ARO?

A legal obligation (liability) associated with retirement of a tangible long-lived asset that results from the acquisition, construction, or development and/or normal operation of a long-lived asset

2

ARC

Asset Retirement Cost
-the amount capitalized (asset) that increases the carrying amount of the long-lived asset when a liability for an ARO is recognized

3

Accretion Expense definition

The increase in ARO liability due to the passage of time calculated using the appropriate accretion date

4

Depreciation Expense definition

Decreases the ARC asset reported on the balance sheet