082 Asset retirement obligation – Impact on balance sheets of retailers became obvious
“Accounting standards of asset retirement obligation (accounting standards 18) became effective from the fiscal year beginning in March 2011. It is interesting enough that percentage of asset retirement obligation over total asset in the retail industry was researched to be 1.06%, the second highest of all the industries after electric power industry.
As retailers often utilize rental assets to expand their business, retailers became influenced a lot by the standard. Especially, restaurant business records outstanding ratio of 2.07%, which doubles the retailers’. And one of the reasons of this result is that since it’s possible to reasonably estimate the useful life of stores by basing on the actual experience of disposal, many retailers recorded liabilities as asset retirement obligation.
