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Nathan Genez

July 14, 2011 Less than a 1 minute read

Can an Asset also be a Liability? An Introduction to SAP Asset Retirement Obligation Management (AROM) (Part 1)

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Former Member

July 14, 2011 at 3:19 pm

Hi Nathan,

should this be also covered under:

Accounting Standards Codification

Topic 410
SubTopic 20
Subsection 50?

rgds,

greg_not_so

Nathan Genez

Blog Post Author

July 14, 2011 at 3:51 pm

A colleague told me that FAS 143 is now referenced by ASC 410. I've been looking into that some today but decided to proceed with the blog since I'll be focusing mostly on the SAP solution. Not sure about the others you mentioned.

Former Member

July 14, 2011 at 4:44 pm

there are also references to XBRL which should be kept in mind:

http://asc.fasb.org/xbrllinks&trid=2175708#7646533
(registration required)

the standards are still being developed, but i don't think either FASB or XBRL are going away any time soon.

for all the complexities whether in law or technology, this is simply good old accounting accrual or provision, but i don't want to monopolize the topic here as you have put a lot of work to create it.

Nathan Genez

Blog Post Author

July 15, 2011 at 4:24 am

Yes, I'm sure the general topic is discussed in multiple areas. It's a bit of a line that I dance around because I mostly want to discuss the SAP solution but I feel compelled to at least reference the source of the regulation... and then provide a few details, then some more, then an entire paragraph, etc.

Vinod Vemuru

December 26, 2013 at 7:10 am

Nice blog Nathan. Digging out for non-technical blogs and found this useful 🙂

Bhawna Sajwani Bhagat

December 30, 2013 at 8:25 am

Hi Nathan ,

Quite an interesting sharing. It is a good read 🙂

Just two quiers

1) Is AROM is linked with inflation management too? So if inflation is increasing- Obligation expenses will also increase?

2) Sometimes because of addtional wear & tear; unplanned deperciation is posted. How this event will be captured in AROM?

Thanks ,

Bhawna

Nathan Genez

Blog Post Author

January 6, 2014 at 3:32 pm

1. No

2. I don't think you'd have to adjust the ARO value because the cost of removing the asset and restoring the property isn't changed. But if an accountant feels differently and wants to revalue the ARO as well, then you can certainly do that from the AROM side. It would then flow through to the ARO asset. But no posting is made to the underlying fixed asset.

Lakshmi Kumari Sama

January 6, 2014 at 11:09 am

Hello Nathan,

Nice & Interesting one and it is absolutely one good read 🙂

Thanks & Regards,

Lakshmi S

Former Member

January 21, 2014 at 8:02 am

Hi Nathan,

Just a quick check is this business function relevant for Oil& Gas Energy or it can be activated in other industries too e.g. Public service industry.

I try to find the business function but I am not able where it is ?

Thanks..

Nathan Genez

Blog Post Author

January 21, 2014 at 2:02 pm

It is not industry specific.

AROM is sold as an add-on. It is not a business function within an EhP.

Former Member

January 22, 2014 at 6:43 am

Hi,

Ohh I see.. so does that add-on comes by default or have to buy separately.

Regards,

Nathan Genez

Blog Post Author

January 22, 2014 at 1:21 pm

Separately. "Sold as an add-on".

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Can an Asset also be a Liability? An Introduction to SAP Asset Retirement Obligation Management (AROM) (Part 1)

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