Section PS 3280 - Asset retirement obligations
Effective date: |
Fiscal years beginning on or after April 1, 2022. Earlier adoption is permitted. |
Published by PSAB: |
August 2018 |
Overview
This Section establishes standards on how to account for and report a liability for asset retirement obligations. The main features of the Section are:
- An asset retirement obligation is a legal obligation associated with the retirement of a tangible capital asset.
- Asset retirement costs associated with a tangible capital asset controlled by the entity increase the carrying amount of the related tangible capital asset (or a component thereof) and are expensed in a rational and systematic manner.
- Asset retirement costs associated with an asset no longer in productive use are expensed.
- Measurement of a liability for an asset retirement obligation should result in the best estimate of the amount required to retire a tangible capital asset (or a component thereof) at the financial statement date.
- Subsequent measurement of the liability can result in either a change in the carrying amount of the related tangible capital asset (or a component thereof), or an expense, depending on the nature of the remeasurement and whether the asset remains in productive use.
- A present value technique is often the best method with which to estimate the liability.
As a consequence of the issuance of Section PS 3280:
- editorial changes have been made to other standards; and
- Section PS 3270 - Solid waste landfill closure and post-closure liability, has been withdrawn.
Section PS 3270 will remain in effect until the adoption of Section PS 3280 for fiscal periods beginning on or after April 1, 2021, unless a public sector entity elects earlier adoption.
History of Section PS 3280
Date |
Development |
Comments |
August 2018 |
This new Section establishes standards on how to account for and report a liability for asset retirement obligations. It applies to fiscal years beginning on or after April 1, 2021. Earlier adoption is permitted |
|
November 2020 |
Deferral of Section PS 3280 due to Covid-19 |
The effective date of the standard has been deferred by one year from April 1, 2021, to April 1, 2022. |
Note: The above summary does not include details of consequential amendments made as the result of other projects.