Asset Retirement Obligation | Valuation of Fixed Assets | Mining Valuation | IFRS | Financial Institutions | Financial Institutions in India | Valuation of Financial Securities
Asset Retirement Obligation An asset retirement obligation (ARO) is a liability associated with the eventual retirement of a fixed asset. The liability is commonly a legal requirement to return a site to its previous condition.
Asset Retirement Obligation An asset retirement obligation (ARO) is a liability associated with the eventual retirement of a fixed asset. The liability is commonly a legal requirement to return a site to its previous condition. A company should recognize the fair value of an ARO when it incurs the liability and if it can make a reasonable estimate of the fair value of the ARO. If a fair value is not initially obtainable, recognize the ARO at a later date, when the fair value becomes available. If a company acquires a fixed asset to which an ARO is attached, recognize a liability for the ARO as of the fixed asset acquisition date. Recognizing this liability as soon as possible gives the readers of a company's financial statements a better grasp of the true state of its obligations Need : Accounting for Asset Retirement Obligations addresses financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs as stated in the statement of Financial Accounting Standards No. 143 (as per US GAAP) & IAS 37 (as per IFRS) ARO generally pertains to specialized industry applications such as offshore oil platforms, nuclear power plants, mining operations, landfills, and underground storage tanks. However, the criteria for recognizing asset retirement obligations are intended to apply to situations encountered more frequently in practice. Major Industries that are covered under the purview of ARO are Oil and Gas, Telecommunication, Utilities, Mining and Retail.
RBSA’s Role In a today’s scenario, it is essential to review the existence of asset retirement obligations. If an asset retirement obligation is identified, we
determine its fair value and subsequently reassess and adjust the obligation, as necessary. Thus, there need for transparent and vigorous valuations to support corporate transactions and to meet regulatory and accounting requirements has increased. But justifying the value of assets and liabilities has grown more complex and critical for most businesses. Our professionals bring merit in valuations to provide you with valuation advice for a multitude of purposes. We, as a team, can help you carry out the model review, model support and model-build activities to arrive at Fair value of Obligations pertaining to asset retirement at any given point of time which companies may need to make key decisions and improve your strategic outcomes and contribute to appropriate financials disclosures as per applicable reporting standards pertaining to Asset Retirement Obligation. Credentials: Following are select credentials in Asset Retirement Obligation: Valuation of Asset Retirement Obligations of Subsea Network of Reliance Globalcom Limited for Financial Reporting Purposes under IFRS. Valuation of Mines and Estimation of Asset Retirement Obligation of Lime Stone Mines of Binani Cements for the purpose of Financial Reporting under IFRS RBSA Services
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