FASB issues Statement on Asset Retirement Obligations.

• Position: Financial Accounting Standards Board - Brief Article

The Financial Accounting Standards Board has issued Statement No. 143, Accounting for Asset Retirement Obligations. Initiated in 1994, the project focused on accounting for the costs of nuclear decommissioning. However, the board later expanded the project's scope to include similar closure costs in other industries that are incurred at any time during the life of an asset.

The standard requires entities to record the fair value of a liability for an asset retirement obligation in the period in which it is incurred. When the liability is initially recorded, the entity capitalizes a cost by increasing the carrying amount of the related long-lived asset. Over time, the liability is accreted to its present value each period, and the...