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Recent Articles
Investment Accounting Methods under US GAAP Explained
What is an investment in accounting? You have probably heard of stock investments, and the term “investment” may lead you to immediately envision stocks, bonds, and mutual funds. While this line of thinking is correct, accountants view investments as this and much...
FASB Clarifies Accounting for Acquired Revenue Contracts with Customers
Summary provided by MaterialAccounting.com: This article explains FASB's new accounting standards update about acquired revenue contracts. Read the article to learn how these changes could impact your business. On October 28, 2021, the Financial Accounting Standards...
Accretion Expense Accounting Explained with Full Example and Journal Entries
What is accretion in accounting? Accretion is the periodic recognition of an expense associated with an increase in the present value of a liability over time. This expense is recognized as an operating expense in the statement of income. In practice, accretion...
ARO (Asset Retirement Obligation) Accounting Example for Oil and Gas Production
Asset Retirement Obligations (ARO) are commonly associated with industries such as oil and gas, mining, waste disposal, or nuclear energy. Some examples specific to the oil and gas industry include oil well plugging and abandonment and underground storage tank...
Asset Retirement Obligation (ARO) Accounting Example for Real Estate
An asset retirement obligation (ARO) represents the legal commitment to remove certain improvements or modifications to an asset at the end of the asset’s use. The FASB’s ASC 410 Asset Retirement and Environmental Obligations (ASC 410) discusses accounting for AROs....
Environmental Liabilities Accounting vs. Asset Retirement Obligations under ASC 410-30
When faced with an obligation to restore a long-lived asset or the environment surrounding it to its original condition, the proper accounting treatment is dependent upon whether the obligation is an asset retirement obligation (ARO) or an environmental obligation...
FASB eases discount rate guidance for nonpublic lessees
The Financial Accounting Standards Board issued an accounting standards update Thursday in an effort to simplify the discount rate guidance for lessees that aren’t public companies, including private companies, nonprofits and employee benefit plans.The amendments in...
Asset Retirement Obligation (ARO) Accounting under ASC 410 and ASC 842 Explained with Example
Have you ever entered into an operating lease for a building, constructed leasehold improvements, and determined based on the provisions of the lease that you are legally obligated to remove the leasehold improvements at the end of the lease? If so, then you had an...