Examples of asset retirement obligations Items that would not be asset retirement obligations Infrastructure assets, such as roads and bridges, are usually never removed from service and therefore would not typically have asset retirement obligations associated with them. The Public Sector Accounting Board (PSAB) asset retirement obligation section will have a significant impact on the public sector. Public sector finance perspectives How to raise your game for disruptive changes ahead. * ... What is the anticipated effect of the proposed standard on asset retirement obligations on your entity? Asset Retirement Obligations (ARO): A Practical Approach to Section PS 3280, This site uses cookies to provide you with a more responsive and personalised service. * Aug 01, 2018. We've created the BDO Library as a "go to" source for informative and thought provoking knowledge resources. At its meeting on September 26-27, 2016, the PSAB considered guidance to be included in an exposure draft to address various issues raised by respondents to the August 2014 Statement of Principles, “Retirement Obligations.” PSAB expects to review an exposure draft at its December 2016 meeting. It was a logical progression for PSAB to consider whether standards were required for Asset Retirement Obligations (“AROs”). X PSAB _ Other Issue Description In March 2017, the Public Sector Accounting Standards Board released a new exposure draft entitled Asset Retirement Obligations, Proposed Section PS 3280. Michael A. Puskaric, Director. This standard is intended to provide guidance, which does not currently exist in the Handbook, on accounting for Asset Retirement Obligations (AROs). • Contamination needs to exist. In a market with complex regulatory requirements, BDO’s efficient, tailored approach turns risks into opportunities. Section PS 3280, Asset Retirement Obligations, was issued by the Public Sector Accounting Standards Board (PSAB or the “Board”) August 2018. Helping real estate and construction companies thrive in every economic environment. The entire disclosure for an asset retirement obligation and the associated long-lived asset. PSAB approved an Asset Retirement Obligations project. The main features of the new Section are: This Section applies to fiscal years beginning on or after April 1, 2021. ACCOUNTING .06 Governments need to present information about the complete stock of their tangible capital assets and amortization in the summary financial statements to demonstrate stewardship and the cost of using those assets to deliver programs and provide services. In addition, PSAB is working on other new sections that will impact municipality financial reporting. Fair value of a contributed tangible capital asset may be estimated using market or appraisal values. It will reconsider this matter when considering the need for a post-implementation review of Section PS 3280. Asset Retirement Obligation is a legal and accounting requirement, in which a company needs to make provisions for the retirement of a tangible long-lived asset in order to bring the asset back to its original condition after the business is done using the asset. This new Section will be effective for fiscal years beginning on or after April 1, 2021. BDO Canada LLP, a Canadian limited liability partnership, is a member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms. PS 3400 Revenue (New) November 2018 Effective for fiscal years beginning on or after April 1, 2022. Strategies and support for a continuously evolving marketplace. Exam questions, and is normally the shortest of the new asset retirement.! 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