F10: Asset Retirement Obligations Flashcards Preview

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Flashcards in F10: Asset Retirement Obligations Deck (4)
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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



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


Accretion Expense definition

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


Depreciation Expense definition

Decreases the ARC asset reported on the balance sheet