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November 1, 2002
TO: Membership of the Society of Depreciation Professionals
FROM: John Ferguson, Chairman, SDP Current Issues Committee
The FERC has issued its proposal for dealing with asset retirement obligations that qualify for liability treatment under SFAS 143. The purpose of this Committee letter is to transmit the proposal to SDP members. The entire document is quite large - composed mostly of the changed FERC report Form 1, 1-F,2, 2-F and 6 pages. These changed pages have been deleted from the attached document. Those interested in the complete document can find it on the FERC web site.
The FERC has adopted the SFAS 143 treatment of ARO for regulatory accounting purposes, which precludes the need for maintaining two sets of books. This action suggests that the FERC will also adopt whatever treatment of non-ARO cost of removal is in the final SOP on property, plant and equipment. I will discuss the FERC proposal in a later Committee letter.
FERC Proposal (PDF Format)
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