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Brown, Williams, Moorhead & Quinn, Inc.

An ARO is a legal obligation associated with the retirement of long-lived tangible assets. As a result of existing law, regulation, contractual or promissory estoppel, a company may be required to retire and remove certain facilities, including related obligations to restore the land to its original condition. The cash flow and financial reporting are recorded according to guidelines set out by the Financial Accounting Standards Board (FASB). The employment of an ARO requires that the legal obligation associated with the retirement of tangible long-lived assets be recognized as a liability and measured at fair value at the time the asset was acquired. In essence, it is an amount at which the ARO liability could be incurred in a current transaction. Brown Williams has been at the forefront of ARO developments for several years and can guide its clients to establish appropriate levels of ARO balances.