Mar
6
2012

Essay: Asset Retirement Obligation

Sample Essay

The asset is thus reduced over the life of the issue as depreciation expense over the life of the asset while the liability undergoes an accretion expense, representing movement of the ARO liability towards its estimated future value. At the point of maturity, the asset is completely depreciated while the liability is equal to the complete amount of the obligation due for cleanup or taking the asset back to its original state.

The asset retirement obligation is important because if it is not recognized, assets on the balance sheet would be overrepresented. This is because at maturity, the asset will show a value equal to the cost of cleaning up that will be required and hence at the end this value will drop immediately, not representing the balance sheet or the position of the asset as it truly is. This gives a false presentation.

 These are model essays please place an order for custom essays, research papers, term papers, thesis, dissertation, case studies and book reports.

Comments are closed.

Quality & Excellence

  • 100% Guaranteed plagiarism free
  • Satisfied customers worldwide
  • Excellent 24 7 customer support
  • Guaranteed privacy
  • Delivery prior to deadline
  • Professional PhD and MBA writers
  • Up-to-date sources only

Order Now

Like us on Facebook

Bumper Offer 25% Off

25% Discount

Simultaneously place 4 orders and get 25% off the least expensive assignment.

  • FREE Outline
  • FREE Title page
  • FREE Bibliography
  • FREE E-mail delivery
  • FREE Formatting