The guidance for asset retirement obligations prescribes the accounting for obli
ID: 2551579 • Letter: T
Question
The guidance for asset retirement obligations prescribes the accounting for obligations related to the retirement of long-lived tangible assets. A liability for an asset retirement obligation (ARO) within the scope of this guidance may arise solely from A. The improper operation of a long-lived asset. B. The acquisition, construction, development, or normal operation of a long-lived asset. C. The temporary idling of a long-lived asset. D. A plan to sell a long-lived asset. The guidance for asset retirement obligations prescribes the accounting for obligations related to the retirement of long-lived tangible assets. A liability for an asset retirement obligation (ARO) within the scope of this guidance may arise solely from A. The improper operation of a long-lived asset. B. The acquisition, construction, development, or normal operation of a long-lived asset. C. The temporary idling of a long-lived asset. D. A plan to sell a long-lived asset.Explanation / Answer
Answer is B. The Acquisition, construction, development or normal operation of a long-lived asset.
Explanation:
The guidance provides for the creation of ARO on acquiring or developing the assets and during its normal usage for production.
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