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Author's profile photo Nathan Genez

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

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      Author's profile photo Gregory Misiorek
      Gregory Misiorek
      Hi Nathan,

      should this be also covered under:

      Accounting Standards Codification

      Topic 410
      SubTopic 20
      Subsection 50?

      rgds,

      greg_not_so

      Author's profile photo Nathan Genez
      Nathan Genez
      Blog Post Author
      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.
      Author's profile photo Gregory Misiorek
      Gregory Misiorek
      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.

      Author's profile photo Nathan Genez
      Nathan Genez
      Blog Post Author
      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. 
      Author's profile photo Vinod Vemuru
      Vinod Vemuru

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

      Author's profile photo bhawna sajwani
      bhawna sajwani

      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

      Author's profile photo Nathan Genez
      Nathan Genez
      Blog Post Author

      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.

      Author's profile photo Lakshmi Sama
      Lakshmi Sama

      Hello Nathan,

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

      Thanks & Regards,

      Lakshmi S

      Author's profile photo Former Member
      Former Member

      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..

      Author's profile photo Nathan Genez
      Nathan Genez
      Blog Post Author

      It is not industry specific.

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

      Author's profile photo Former Member
      Former Member

      Hi,

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

      Regards,

      Author's profile photo Nathan Genez
      Nathan Genez
      Blog Post Author

      Separately.  "Sold as an add-on".