# ASC 410-980: Asset Retirement and Environmental Obligations — Regulated Operations Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/410/980/) Study and research edition. Verify current requirements with the official source. Summaries, enrichment, and tags are machine-generated study aids. Paragraph html preserves source markup; snippet is abbreviated. Pending content is not necessarily effective. Tables and mathematical or amendment markup are retained as HTML where Markdown would lose structure. Source downloaded (UTC): 2026-09-10T00:22:01.250Z to 2026-09-10T00:22:29.648Z Record version: sha256:8e1582ea9fc31fe15e4b98d44ed14ce080fe86e27df95570de7b946c5c1085e4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 410-980: Asset Retirement and Environmental Obligations — Regulated Operations ### Machine-generated study aids ```json { "summary": "ASC 410-980 explains how rate-regulated entities apply the asset retirement obligation (ARO) model of Subtopic 410-20. Because rate regulation may allow recovery of retirement costs on a timing pattern different from GAAP ARO cost recognition, a regulated entity that meets the requirements of Topic 980 recognizes a regulatory asset or regulatory liability for that timing difference. Capitalized asset retirement cost is included in long-lived asset impairment testing on the same basis as for any other entity.", "key_points": [ "Nuclear plant decommissioning costs are incurred costs imposed by regulation or statute (similar to the obligation to restore land after strip mining), so paragraph 980-405-25-1(b) does not address those costs (410-980-25-1).", "Rate-regulated entities may recover retirement costs in customer rates on a timing pattern that differs from period cost recognition under Subtopic 410-20, and a timing difference can also arise when retirement costs are included in amounts charged to customers but no liability is recognized (410-980-25-2).", "If the requirements of Topic 980 are met, the regulated entity recognizes a regulatory asset or regulatory liability for the difference between financial reporting recognition of ARO period costs and rate-making recognition (410-980-25-2).", "Some retirement costs recovered in rates arise from AROs within the scope of Subtopic 410-20 and others do not; only the former follow that Subtopic (410-980-25-2).", "The capitalized amount of an asset retirement cost is included in the impairment assessment of a rate-regulated entity's long-lived assets just as for any other entity (410-980-35-1).", "Subtopic 980-360 applies to the asset retirement cost related to a rate-regulated long-lived asset that has been closed or abandoned (410-980-35-1).", "The Subtopic follows the same scope and scope exceptions as Section 980-10-15 (410-980-15-1)." ], "categories": [ "Recognition", "Impairment", "Industry-specific", "Subsequent measurement" ], "audience_level": "intermediate", "student_note": "This is the bridge between the ARO model and rate regulation: utilities still record AROs under 410-20 for financial reporting, and the rate-recovery mismatch is resolved through a regulatory asset or liability rather than by deferring the ARO itself. A common error is assuming that because decommissioning costs are collected in rates, no ARO liability or no impairment testing of the capitalized retirement cost is needed.", "related_topics": [ "410-20", "980-10", "980-340", "980-360", "980-405" ], "key_concepts": [ "asset retirement obligation", "rate-regulated operations", "regulatory asset", "regulatory liability", "nuclear plant decommissioning costs", "asset retirement cost", "recovery through customer rates", "abandoned plant" ] } ``` Source downloaded (UTC): 2026-09-10T00:22:01.250Z to 2026-09-10T00:22:01.250Z Record version: sha256:52ab8a4604fb23f7dc3c4afb5b7fd93fc20c6338869b9bea4c809af1bd8af9d9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 410-980-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/410/980/#05-overview-and-background) SEC content: no ##### [410-980-05-1](https://asc.understandingaccounting.org/asc/410/980/#410-980-05-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:22:01.250Z to 2026-09-10T00:22:01.250Z Record version: sha256:a5eca23abe617dc2e15710970a463a030f26a1829d721138184558a4651590ef Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic provides guidance for asset retirement obligations for entities with regulated operations. Source downloaded (UTC): 2026-09-10T00:22:04.135Z to 2026-09-10T00:22:04.135Z Record version: sha256:859d0e75cb96e6849338c2759f1dc34107d99f609a2bdebeb04f13235e2a507b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 410-980-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/410/980/#15-scope-and-scope-exceptions) SEC content: no #### Overall Guidance ##### [410-980-15-1](https://asc.understandingaccounting.org/asc/410/980/#410-980-15-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:22:04.135Z to 2026-09-10T00:22:04.135Z Record version: sha256:23afdb3253cdac8bab489d2dc29cbd9fc50049b91574e7aa03854f7a989f4f59 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 980-10-15. Source downloaded (UTC): 2026-09-10T00:22:07.259Z to 2026-09-10T00:22:07.259Z Record version: sha256:3712fbe4dac214766f983a779ffb1f3b16a05b711c48fb7cab427e9be501dcab Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 410-980-25: 25 Recognition [Read section](https://asc.understandingaccounting.org/asc/410/980/#25-recognition) SEC content: no #### Decommissioning Costs ##### [410-980-25-1](https://asc.understandingaccounting.org/asc/410/980/#410-980-25-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:22:07.259Z to 2026-09-10T00:22:07.259Z Record version: sha256:4933fb05a4c0d5da3354d11a6ae0ab71216bb03b880819b6060e7a3bf2ac18fb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Nuclear plant decommissioning costs are incurred costs in the current accounting framework. Those costs and the related liabilities are imposed by regulation or statute, similar to the liability to restore the land after strip mining. Accordingly, paragraph [980-405-25-1(b)](https://asc.understandingaccounting.org/asc/405/980/#405-980-25-1) does not address those costs. #### Costs from Asset Retirement Obligations ##### [410-980-25-2](https://asc.understandingaccounting.org/asc/410/980/#410-980-25-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:22:07.259Z to 2026-09-10T00:22:07.259Z Record version: sha256:3cd552ee85893214ea7f8bdd8dcb041ec86f65ba0b395d613b368cece6818cb9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Many rate-regulated entities currently provide for the costs related to the retirement of certain long-lived assets in their financial statements and recover those amounts in rates charged to their customers. Some of those costs result from asset retirement obligations within the scope of Subtopic 410-20; others result from costs that are not within the scope of that Subtopic. The amounts charged to customers for the costs related to the retirement of long-lived assets may differ from the period costs recognized in accordance with that Subtopic and, therefore, may result in a difference in the timing of recognition of period costs for financial reporting and rate-making purposes. An additional recognition timing difference may exist when the costs related to the retirement of long-lived assets are included in amounts charged to customers but liabilities are not recognized in the financial statements. If the requirements of this Topic are met, a regulated entity also shall recognize a regulatory asset or liability for differences in the timing of recognition of the period costs associated with asset retirement obligations for financial reporting pursuant to that Subtopic and rate-making purposes. Source downloaded (UTC): 2026-09-10T00:22:09.348Z to 2026-09-10T00:22:09.348Z Record version: sha256:614017095d7cd9471ceb57f0355bdf2ff1c6c9e9f4e9ec254d686b33c0e9266d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 410-980-35: 35 Subsequent Measurement [Read section](https://asc.understandingaccounting.org/asc/410/980/#35-subsequent-measurement) SEC content: no ##### [410-980-35-1](https://asc.understandingaccounting.org/asc/410/980/#410-980-35-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:22:09.348Z to 2026-09-10T00:22:09.348Z Record version: sha256:429fd4061acb36b4ce620ad7e1587391c2e91507beeb8fb2aa2a04d0400d3c00 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The capitalized amount of an asset retirement cost shall be included in the assessment of impairment of long-lived assets of a rate-regulated entity just as that cost is included in the assessment of impairment of long-lived assets of any other entity. Subtopic 980-360 applies to the asset retirement cost related to a long-lived asset of a rate-regulated entity that has been closed or abandoned. Source downloaded (UTC): 2026-09-10T00:22:16.106Z to 2026-09-10T00:22:16.106Z Record version: sha256:0a42963e7f7c99c38c6f4c5dab8679ce818dcf5de7a30b9f9cace45fc3ab71fb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 410-980-S00: SEC 00 Status [Read section](https://asc.understandingaccounting.org/asc/410/980/#sec-00-status) SEC content: yes ##### [410-980-S00-1](https://asc.understandingaccounting.org/asc/410/980/#410-980-S00-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:22:16.106Z to 2026-09-10T00:22:16.106Z Record version: sha256:ba711627021029aea135703ac1530acd21d7ecaadcecae861b7c9b27d191645e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following table identifies the changes made to this Subtopic.
ParagraphActionAccounting Standards UpdateDate
980-410-S99-1AmendedAccounting Standards Update No. 2009-0308/24/2009
Source downloaded (UTC): 2026-09-10T00:22:18.692Z to 2026-09-10T00:22:18.692Z Record version: sha256:9f2e066caed1d709d32f6e1951308c102d624864f8d20e8dca3ede0bdccb4c48 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 410-980-S25: SEC 25 Recognition [Read section](https://asc.understandingaccounting.org/asc/410/980/#sec-25-recognition) SEC content: yes #### Environmental Remediation Liabilities ##### [410-980-S25-1](https://asc.understandingaccounting.org/asc/410/980/#410-980-S25-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:22:18.692Z to 2026-09-10T00:22:18.692Z Record version: sha256:aa1903c68815fe55d3ae6ec3d512a27b152194496d14327a9b8c44ca2ff76e26 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [980-410-S99-1](https://asc.understandingaccounting.org/asc/410/980/#410-980-S99-1), SAB Topic 10.F, Question 2, for SEC Staff views on the recognition of environmental remediation liabilities. Source downloaded (UTC): 2026-09-10T00:22:22.586Z to 2026-09-10T00:22:22.586Z Record version: sha256:28719f5585d46ef1ab9076c0d3397cd772ddda19074b3da2691e6ec3a221ae94 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 410-980-S45: SEC 45 Other Presentation Matters [Read section](https://asc.understandingaccounting.org/asc/410/980/#sec-45-other-presentation-matters) SEC content: yes #### Presentation of Liabilities for Environmental Costs ##### [410-980-S45-1](https://asc.understandingaccounting.org/asc/410/980/#410-980-S45-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:22:22.586Z to 2026-09-10T00:22:22.586Z Record version: sha256:e22a2525311571666416cd854f848bb04cfbb4b657d57cca12923987fb82d7d6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [980-410-S99-1](https://asc.understandingaccounting.org/asc/410/980/#410-980-S99-1), SAB Topic 10.F, Question 1, for SEC Staff views on the presentation of environmental remediation liabilities. Source downloaded (UTC): 2026-09-10T00:22:29.648Z to 2026-09-10T00:22:29.648Z Record version: sha256:95cd310ad4083203a7327a6feacf2f10c62542f8b08664a7f902be88dcf4fb0a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 410-980-S99: SEC 99 SEC Materials [Read section](https://asc.understandingaccounting.org/asc/410/980/#sec-99-sec-materials) SEC content: yes #### SEC Staff Guidance ##### [410-980-S99-1](https://asc.understandingaccounting.org/asc/410/980/#410-980-S99-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:22:29.648Z to 2026-09-10T00:22:29.648Z Record version: sha256:37af3da65c6d117e5980a58f8b64b7006165d1464526cea48d5885502c17737b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following is the text of SAB Topic 10.F, Presentation of Liabilities for Environmental Costs. - Facts: A public utility company determines that it is obligated to pay material amounts as a result of an environmental liability. These amounts may relate to, for example, damages attributed to clean-up of hazardous wastes, reclamation costs, fines, and litigation costs. - Question 1: May a rate-regulated enterprise present on its balance sheet the amount of its estimated liability for environmental costs net of probable future revenue resulting from the inclusion of such costs in allowable costs for rate-making purposes? - Interpretive Response: No. Statement 71 \[paragraph [980-340-25-1](https://asc.understandingaccounting.org/asc/340/980/#340-980-25-1)\] specifies the conditions under which rate actions of a regulator can provide reasonable assurance of the existence of an asset. The staff believes that environmental costs meeting the criteria of paragraph 9 FN6 of Statement 71 \[paragraph [980-340-25-1](https://asc.understandingaccounting.org/asc/340/980/#340-980-25-1)\] should be presented on the balance sheet as an asset and should not be offset against the liability. Contingent recoveries through rates that do not meet the criteria of paragraph 9 \[paragraph [980-340-25-1](https://asc.understandingaccounting.org/asc/340/980/#340-980-25-1)\] should not be recognized either as an asset or as a reduction of the probable liability. - FN6 Paragraph 9 of Statement 71 \[paragraph [980-340-25-1](https://asc.understandingaccounting.org/asc/340/980/#340-980-25-1)\] requires a rate-regulated enterprise to capitalize all or part of an incurred cost that would otherwise be charged to expense if it is probable that future revenue will be provided to recover the previously incurred cost from inclusion of the costs in allowable costs for rate-making purposes. - Question 2: May a rate-regulated enterprise delay recognition of a probable and estimable liability for environmental costs which it has incurred at the date of the latest balance sheet until the regulator's deliberations have proceeded to a point enabling management to determine whether this cost is likely to be included in allowable costs for rate-making purposes? - Interpretive Response: No. Statement 5 \[paragraph [450-20-25-2](https://asc.understandingaccounting.org/asc/450/20/#450-20-25-2)\] states that an estimated loss from a loss contingency shall be accrued by a charge to income if it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. FN7 The staff believes that actions of a regulator can affect whether an incurred cost is capitalized or expensed pursuant to Statement 71 \[paragraph [980-340-25-1](https://asc.understandingaccounting.org/asc/340/980/#340-980-25-1)\], but the regulator's actions cannot affect the timing of the recognition of the liability. - FN7 Registrants also should apply the guidance of SOP 96-1 \[Section 410-30-25\] in determining the appropriate recognition of environmental remediation costs.