Flashcards: Asset Retirement Obligations

Which of the following is untrue regarding asset retirement obligations?

A business should recognize the fair value of an asset retirement obligations when it incurs the liability and if it can make a reasonable estimate of its fair value

If the fair value of an asset retirement obligation cannot initially be obtained, the liability can be recorded at a later date when the fair value is available

If a company acquires a fixed asset to which an asset retirement obligation is attached, the company should recognize a liability as of the acquisition date

When estimating the fair value of an asset retirement obligation, a company should use a discounted cash flow model using a rate that factors in market risk

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