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Author's profile photo Jens Kram

Manage Your Asset Retirement Obligations More Accurately

SAP ARO Automates the ARO Management Process

“Asset retirement obligation (ARO)”: This term may not mean much to people outside the finance department, but it’s an important accounting requirement that companies must fulfill, for both regulatory compliance and business reasons. And for many years, it has involved manual, time-consuming steps, especially for companies in asset-intensive industries, such as utilities, telecommunications, oil and gas, mining, and retail.

To help our customers streamline their efforts and increase the accuracy of their ledgers, SAP has developed the application SAP Asset Retirement Obligation Management that automates both the data management and accounting processes associated with managing asset retirement obligations.

Today, the most common method for performing ARO calculations and recordkeeping is using spreadsheets. Once the calculation formulas are validated, once the data is entered or updated in the spreadsheet, the final numbers must be taken and manually posted to the ledger in the SAP system.

SAP ARO takes the pain out of tracking assets over time. No more spreadsheets or manual entry and posting. This application focuses on data management and accounting. It allows users to create, adjust, update and store information regarding asset retirement obligations within the SAP system. It applies financial and accounting standards and performs all the calculations. And it is fully integrated into SAP ERP Financials, so it automatically will handle postings to the general ledger, accruals and asset accounting. Overall this solution provides dramatic time savings while creating a clear audit trail and streamlining regulatory compliance.

If you want to get more information on this topic please go to or directly contact Bret Strobo (

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