In the past it was noned that companies describe the as bent retreat obligation through taking into peak a variety of liabilities. The plus retirement obligation was set up so as to come up a harmonious procedure would be implemented so as to overcome the problem of retiring the long-term plus. Companies should be intimate liabilities for the plus retirement obligation during the time when an obligation is incurred and when there is average estimate that a fair note value will be made for an addition as per the Statement of Financial be Standards (SFAS) N.O 143.
There are different kinds of approaches that are followed when recognizing the asset retirement obligation, these include: recognition of the asset retirement obligation at fair value without considering the uncertainty that emanates from the timing of the retirement, fair value can be recognized when there is likelihood that asset will be retired and the other approach is that companies may wear to recognize an asset until the time retirement of the asset occurs (Guinn, Schroeder, and Sevi, 2005).
An asset refers to the act of getting rid of a long-lived asset through various methods such as; selling, abandoning, recycling or disposing of the asset, but this policy does not apply to the assets that do not contribute to the production of output for an according to the Statements of the Financial report Standards (SFAS) . The exposure draft of Financial Accounting Standards Board (FASB) staff states that the staff?s legal obligation to undertake asset retirement activity is based on the fact that a condition on the future event should be within the scope of Statements of the Financial Accounting Standards (SFAS) No.143.
Statements of the Financial Accounting Standards (SFAS) No.143 overly states that an entity during acquisition,construction,development or in normal operation of the asset should recognize the assets fair value so as to perform the asset retirement activity when...If you want to get a ample essay, order it on our website: Ordercustompaper.com
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