ARC stands for various terms. Discover the full forms, meanings, and possible interpretations of ARC across different fields and industries.
Asset Retirement Cost (ARC) refers to the financial obligations associated with the retirement of a tangible long-lived asset. This includes costs for dismantling, removing, and disposing of the asset, as well as restoring the site to its original condition. The accounting treatment of ARC is governed by specific standards, ensuring that these costs are recognized and measured accurately over the asset's useful life.
In the context of accounting, ARC is capitalized as part of the asset's carrying amount and subsequently depreciated over its useful life. This approach aligns with the matching principle, ensuring that the costs are recognized in the same period as the benefits derived from the asset. Companies must carefully estimate these costs, considering factors such as inflation, technological changes, and regulatory requirements, to ensure compliance and financial accuracy.
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