This Section establishes standards for the recognition, measurement and disclosure of liabilities for asset retirement obligations and the associated asset retirement costs. An asset retirement obligation is a legal obligation associated with the permanent removal of a long-lived asset from service. The obligation is recognized at the best estimate of the amount required to settle the obligation at the balance sheet date. Upon initial recognition of a liability as an asset retirement obligation, an entity increases the carrying amount of the related long-lived asset by the same amount. In subsequent periods, the asset retirement obligation is adjusted for interest accretion and revisions to the estimated cash flows or the discount rate to arrive at the current best estimate of the obligation.
Development
Part II of the CPA Canada Handbook issued
Effective for fiscal years beginning on or after January 1, 2011.
This Section incorporates a simplified method of measuring the amount of an asset retirement obligation.
Note: The above summary does not include details of consequential amendments made as the result of other projects.