Accrued Closure Costs and ARO
|12 Months Ended|
Dec. 31, 2018
|Asset Retirement Obligation Disclosure [Abstract]|
|Accrued Closure Costs and ARO||
ACCRUED CLOSURE COSTS AND ARO
Accrued closure costs represent our estimated environmental liability to clean up our fixed-based regulated facilities as required by our permits, in the event of closure. Changes to reported closure liabilities (current and long-term) for the years ended December 31, 2018 and 2017, were as follows:
The Company recorded an additional $3,323,000 and $1,400,000 in closure liabilities in 2018 and 2017, respectively, due to changes in estimated future closure costs for our M&EC subsidiary which is in closure status (see “Note 4 – M&EC Facility” for further information of these additional closure liabilities recorded). The Company also recorded an additional $1,257,000 in closure liabilities in 2017 for its DSSI subsidiary due to changes in estimated future closure costs.
In 2018 and 2017, the Company had spending of approximately $4,991,000 and $1,872,000, respectively, in closure related activities for the M&EC subsidiary. In 2018 and 2017, the Company had spending of approximately $302,000 and $165,000, respectively, in closure related activities for the PFNWR subsidiary in connection with the closure of certain processing equipment/enclosure.
At December 31, 2018 and 2017, M&EC’s closure liabilities totaled approximately $1,142,000 and $2,791,000, respectively, with the entire amount classified as current.
The reported closure asset or ARO, is reported as a component of “Net Property and equipment” in the Consolidated Balance Sheets at December 31, 2018 and 2017 with the following activity for the years ended December 31, 2018 and 2017:
The impairment of ARO for 2017 resulted from the impairment of M&EC’s remaining tangible assets recorded in 2017 (See “Note 4 – M&EC Facility”). The adjustment made to ARO for 2017 was due to the increase in closure liabilities recorded for the DSSI subsidiary as discussed above.
The entire disclosure for an asset retirement obligation and the associated long-lived asset. An asset retirement obligation is a legal obligation associated with the disposal or retirement from service of a tangible long-lived asset that results from the acquisition, construction or development, or the normal operations of a long-lived asset, except for certain obligations of lessees.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef