PSAB Asset Retirement Obligations (ARO) Standard - Resources PS 3280 is a new accounting standard covering asset retirement obligations (ARO) that was approved by PSAB in March 2018. Examples of what’s in: • Removal of Asbestos • Retirement of x-ray machines • Boilers • Leased site restoration • Landfill closure / post-closure Please read our cookie notice (, PSAB - Concepts Underlying Financial Performance - Overview [Completed], PSAB - Improvements to Not-for-Profit Standards in the public sector [Completed], PSAB - Withdrawal of Disclosure of Related Party Transactions by Not-for-Profit Organizations, Section PS 4260 [Completed], PSAB – Purchased Intangibles – Narrow Scope Amendment [Completed], PSAB – 2019-2020 Annual Improvements Project [Completed], PSAB – 2018 – 2019 Annual Improvements Project [Completed], PSAB - Strategic Plan for 2017 – 2021 [Completed], PSAB - Review of International Strategy [Completed], PSAB - Asset Retirement Obligations [Completed], PSAB - Financial Instruments – Subsequent Issues [Completed], CIPFA: Exploring Accounting for the Cloud [Completed], PSAB - Concepts Underlying Financial Performance - Measuring Financial Performance in Public Sector Financial Statements [Completed], PSAB - Concepts Underlying Financial Performance - Conceptual Framework Fundamentals and the Reporting Model [Completed], http://www2.deloitte.com/ca/en/legal/cookies.html, Section PS 3270 - Solid waste landfill closure and post-closure liability, In Brief – Asset Retirement Obligations and Liability for Contaminated Sites — determining which standard should be applied, In Brief – How Asset Retirement Obligations, Section PS 3280 applies to asset retirement obligations associated with landfills, In Brief and Podcast – Asset Retirement Obligations, Section PS 3280, Asset Retirement Obligations – Basis for Conclusions and new standard, Exposure Draft – Asset Retirement Obligations, Proposed Section PS 3280, Message from the PSAB Chair – January 2017, Deloitte LLP Response to Retirement Obligations SOP. Municipal councils have a vital role to play in setting the tone for a successful implementation and financial reporting success. Asset retirement obligation involves the retirement of a long-lived asset that depends on a future event beyond the control of an obligated party. Once entered, they are only PSAB requested further analysis and examples from the task force. As a consequence of the issuance of Section PS 3280: Section PS 3270 will remain in effect until the adoption of Section PS 3280 for fiscal periods beginning on or after April 1, 2021, unless a public sector entity elects earlier adoption. Recognition and Measurement Recognition and measurement of the liability will be a major issue as will be accounting for the related expense. Tools and Strategies to Facilitate PS 3280 Compliance (Asset Retirement Obligations) REGISTER HERE . The standard must be applied by all public sector entities who prepare their financial statements under PSAB, including all Canadian municipalities. Note: An asset retirement obligation can apply to an asset that is in productive use or not in productive use. Please turn off compatibility mode, upgrade your browser to at least Internet Explorer 9, or try using another browser such as Google Chrome or Mozilla Firefox. contributed asset is considered equal to its fair value at the date of contribution. It is generally applicable when a company is responsible for removing equipment or cleaning up hazardous materials at some agreed-upon future date. At its meeting on December 15-16, 2016, the PSAB approved an Exposure Draft, “Asset Retirement Obligations.” The document is expected to be issued in March 2017. Public Sector Accounting Board Exposure Draft: Asset Retirement Obligations, Proposed Section PS 3280. Exposure Draft – Asset Retirement Obligations, Proposed Section PS 3280. 17 Aug 2020 PDF. This standard is intended to provide guidance, which does not currently exist in the Handbook, on accounting for Asset Retirement Obligations (AROs). Subject AccountingLink. adm.com. On December 7, the Governmental Accounting Standards Board (GASB) issued guidance for state and local governments addressing liabilities known as “asset retirement obligations.” An asset retirement obligation (ARO) is a legally enforceable liability associated with the retirement of a tangible capital asset. PS 3280 Asset Retirement Obligations (cont’d) Determining which standard should be applied Section PS 3280 Section PS 3260 Cause for the retirement or remediation obligation • Acquisition, construction, development, normal use. Jan 27, 2017. Asset retirement costs associated with a tangible capital asset controlled by the entity increase the carrying amount of the related tangible capital asset (or a component thereof) and are expensed in a rational and systematic manner. Publications Financial Reporting Developments. Asset retirement obligation accounting often applies to companies that create physical infrastructure which must be dismantled before a land lease … Likely the most significant reason for this is that PS 3260 applies, for the most part, to assets that are not in productive use. The project is expected to commence in 2012. Early adoption is permitted. Our professionals combine hands-on farm experience with strategic and financial insight. PS 3280 Asset Retirement Obligations (cont’d) Determining which standard should be applied Section PS 3280 Section PS 3260 Cause for the retirement or remediation obligation • Acquisition, construction, development, normal use. The project will address the reporting of legal obligations associated with the retirement of long-lived tangible capital assets currently in productive use. accounting for asset retirement obligations other relevant reporting issues public sector accounting board (PSAB) standard-setting activities and the potential impact on financial reporting by First Nations dismantling of a TCA). Asset retirement obligations are recognized as at the financial reporting date when all of the following criteria are met: There is a legal obligation (i.e., a clear duty or responsibility to another party) to incur retirement costs in relation to a ... PSAB Alert: Release of PS 3280 Asset Retirement Obligations This new Sec­tion es­tab­lishes stan­dards on how to ac­count for and re­port a li­a­bil­ity for as­set re­tire­ment oblig­a­tions. This new Section establishes standards on how to account for and report a liability for asset retirement obligations. 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. Standard-Setting in Canada. Published on April 4, 2017. The PSADG covered a number of topics earlier in June, including a Consultation Paper and two Statements of Principles issued for comment by the PSAB, and more. How to adopt construction technology in a smart and minimally disruptive way. On Au­gust 1, 2018, new Sec­tion PS 3280 was is­sued to the PSA Hand­book. It was a logical progression for PSAB to consider whether standards were required for Asset Retirement Obligations (“AROs”). This new section is the only ARO standard to explicitly define buildings with asbestos as in scope. Asset retirement obligations Learn about the new Asset Retirement Obligation standard PS 3280 and hear a discussion on what types of assets could be impacted by this new standard. 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