Public Sector Accounting Standards

Asset Retirement Obligations


A new accounting standard that addresses the reporting of legal obligations associated with the retirement of tangible capital assets is required.

Staff Contact(s)

Joanna Chrzanowski, CPA, CA

Principal, Public Sector Accounting Board

Meeting & event summaries

March 22, 2018

PSAB Decision Summary – March 22-23, 2018

The Board approved the final Handbook Section PS 3280, Asset Retirement Obligations. This new Section will be effective for fiscal years beginning on or after April 1, 2021. Earlier adoption is permitted.

December 14, 2017

PSAB Decision Summary – December 14-15, 2017

The Board reviewed the comments to the Exposure Draft, “Asset Retirement Obligations, Proposed Section PS 3280,” and gave feedback. A final standard will be presented for approval at the Board’s next meeting in March 2018.

December 15, 2016

PSAB Decision Summary – December 15-16, 2016

PSAB approved an Exposure Draft, “Asset Retirement Obligations.” The document is expected to be issued in March 2017.

September 26, 2016

PSAB Decision Summary – September 26-27, 2016

PSAB considered guidance to be included in an exposure draft to address various issues raised by respondents to the August 2014 Statement of Principles, “Retirement Obligations.” PSAB expects to review an exposure draft at its December 2016 meeting.

June 16, 2016

PSAB Decision Summary – June 16-17, 2016

PSAB received an update on the project and considered the inclusion of solid waste closure and post-closure costs within the scope of the project. PSAB requested further analysis and examples from the task force.

March 23, 2016

PSAB Decision Summary – March 23-24, 2016

PSAB received an update on the project, including consideration of the accounting for the asset retirement costs and provided feedback to the task force.

June 16, 2014

PSAB Decision Summary – June 16-17, 2014

PSAB reviewed a draft statement of principles, “Retirement Obligations,” and requested that the document clarify the difference between retirement and replacement or renewal of tangible capital assets.

PSAB approved the following proposed principles:

  • Retirement obligations associated with tangible capital assets include those resulting from legal, constructive and equitable obligations.
  • Retirement costs increase the carrying amount of the related tangible capital asset or a component thereof and are expensed in a rational and systematic manner.
  • Retirement obligations would be measured using best estimate methodologies.
  • Subsequent remeasurement of the retirement obligation liability 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.
  • Retirement obligations associated with tangible capital assets include post-retirement operation, maintenance and monitoring.

March 20, 2014

PSAB Decision Summary – March 20-21, 2014

PSAB provided feedback to its task force on the scope and recognition proposals. PSAB will continue its deliberation on other proposals in a draft statement of principles at the June 2014 meeting.

December 15, 2011

PSAB December 15-16, 2011 Decision Summary

PSAB approved an Asset Retirement Obligations project.  The project is expected to commence in 2012.  The project will address the reporting of legal obligations associated with the retirement of long-lived tangible capital assets currently in productive use.  Recognition and measurement of the liability will be a major issue as will be accounting for the related expense.


This project summary has been prepared for information purposes only. Decisions reported are tentative and reflect only the current status of discussions on this project, which may change after further Board deliberations. Decisions to publish Handbook material are final only after a formal ballot process.