Question

Asset retirement obligations:

A. Are liabilities associated with the restoration of a long-term asset.
B .Increase the balance in the related asset account.
C. Are measured at fair value in the balance sheet.
D. All of these answer choices are correct.

Answer 1

Answer:

The correct answer is D

Explanation:

ARO stands for Asset retirement obligations, it is a legal obligation which is linked or associated with the retirement of the tangible as well as long lived asset in which the method of the settlement could be conditional on the future event.

So, these are the liabilities linked with the long term asset restoration, evaluated at the fair value in the balance sheet and also increase the balance in the related account of asset.