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Flashcards in Asset retirement obligation Deck (4)
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1

Computation of ARO
JE of PPE with an ARO

present value of obligation

PPE (PV of ARO + cost)
ARO
Cash

2

JE for yearly accretion expense

Accretion expense - IS
ARO

Present value of ARO X interest rate

3

Computation of depreciation of assets with ARO

ARO - compute by straight line
PPE - compute separately if a different method is used

Depreciation expense - ARO
Depreciation expense - PPE
Acc. Depreciation

4

Upon retirement - JE

ARO
Loss on ARO
Cash/Payable (actual amt paid)
Gain on asset retirement (if applicable)