FASB Issues Statement For Asset Retirement Obligations.The Financial Accounting Standards Board Financial Accounting Standards Board (FASB) Board composed of independent members who create and interpret Generally Accepted Accounting Principles (GAAP). issued Statement No. 143, Accounting for Asset Retirement Obligations Asset Retirement Obligations provide for future disposal of assets as required by SFAS 143 [1]. Firms must recognize the ARO liability in the period it was acquired, generally acquisition. . Initiated in 1994, the project focused on accounting for the costs of nuclear decommissioning The decommissioning of nuclear power plants is sometimes referred to as nuclear decommissioning, to mark the difference between 'conventional' decommissioning and dismantling projects. and was expanded to include similar closure costs that are incurred at any time during the life of an asset. The standard requires entities to record the fair value of a liability for an asset retirement obligation in the period in which it is incurred. When the liability is initially recorded, the entity capitalizes a cost by increasing the carrying amount of the related long-lived asset. Over time, the liability is accreted to its present value each period, and the capitalized Capitalized Recorded in asset accounts and then depreciated or amortized, as is appropriate for expenditures for items with useful lives longer than one year. cost is depreciated Depreciated may refer to:
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