Determine the appropriate accounting recognition of the ARO under USGAAP and IFRS.

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Determine the appropriate accounting recognition of the ARO under USGAAP and IFRS.

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Answer 1

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Under USGAAP, ARO shall be recognized as an asset. It means that ARO shall be capitalized in the books and also it will be depriciated over the period of useful life.

Where as under IFRS, one of the component would be related to PPE and other component would be liability which shall be recognized at cost incurred at the time of acquisition and cost incurred during the year.

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Answer 2

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Determine the appropriate accounting recognition of the ARO under USGAAP and IFRS.

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Determine the appropriate accounting recognition of the ARO under USGAAP and IFRS.

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