Every obligation, rate, and schedule is fully documented.
Your team can review and export every calculation.
Security, performance, and availability you can trust.
The Six Core ARO Measurement Calculations
These are the building blocks of every Asset Retirement Obligation. Each one is automated, documented, and visible to your finance team and auditors.
Initial ARO Liability Measurement
We calculate the present value of your expected retirement cash flows using a documented discount rate, aligned with ASC 410-20.
You enter the expected decommissioning costs and timing; the system applies the chosen rate and shows the present value.
The inputs, rate, and resulting liability are stored with each obligation so you and your auditors can see how the number was derived.
Asset Retirement Cost (ARC) Capitalization
The ARO liability amount is capitalized as part of the related asset cost so it can be depreciated over the asset's life.
You see the ARC value attached to the asset, not buried in a spreadsheet formula.
The platform posts the correct initial journal entry (Dr ARC / Cr ARO Liability) and ties it to the asset record.
Accretion Expense Schedule
As time passes, the ARO liability grows with interest (accretion) so it reaches the full expected cost by settlement.
You get a period-by-period schedule showing accretion expense and updated liability balances.
For each cost layer, the system generates an accretion schedule that can be reviewed, exported, and posted to your general ledger.
Depreciation of the ARC
The capitalized retirement cost (ARC) is depreciated over the asset's useful life, alongside other asset costs.
Finance sees ARC depreciation by period without maintaining separate offline models.
Depreciation follows your configured useful life and method, and the ARC's net book value is updated automatically.
ARO Liability Rollforward
We show how the liability moves from opening to closing balance: additions, accretion, settlements, and changes in estimate.
One report tells the full story for management and auditors—no need to reconcile multiple spreadsheets.
Rollforward reports are generated from actual cost layers and postings, so balances always tie out.
ARC Net Book Value Tracking
We track the remaining ARC on your books after depreciation and any changes in estimate.
You can see the ARC's net book value at any period end, ready to feed fixed asset and disclosure reporting.
NBV is updated whenever schedules run, estimates change, or terminations occur, with a full audit trail.
Cost Layers & Change-in-Estimate Calculations
Real AROs rarely stay flat. VIZIO ARO lets you add new cost layers, adjust estimates, and correct mistakes while keeping a clear audit trail of how and why each obligation changed.
First estimate of retirement cost for a new obligation (for example, a well, facility, or asset group).
Additional cost layer that increases the total expected retirement cost while preserving the original history.
An adjustment that reduces expected retirement cost, with full visibility into before/after values.
Re-estimation when useful life is extended or shortened, updating cash flow timing and discounting.
Bulk update of amounts, dates, or other fields across multiple obligations or cost layers in one step.
Neutralizes the financial impact of an erroneous layer while keeping an audit trail of what changed and why.
Settlement & Termination Calculations
When obligations are settled or terminated, you need to know exactly how the liability, cash flows, and any gain or loss are calculated. The platform walks you through each step.
Recording the difference between actual decommissioning costs and the carrying amount of the ARO liability.
Settling only part of an obligation (for example, some wells in a field) while other cost layers remain active.
Handling cases where the obligation is closed but no material cash outflow occurs at settlement.
Calculating and posting gains or losses when actual settlement differs from the recorded liability.
Distinguishing between closing an individual layer and closing all layers for an obligation.
Bulk termination or reversal of obligations and cost layers with consistent financial treatment.
Posting & Journal Entry Calculations
Behind every schedule is a set of journal entries. VIZIO ARO shows which postings are created, how they are calculated, and how they flow into your general ledger.
Dr Asset Retirement Cost / Cr ARO Liability when the obligation is first recognized.
Dr Accretion Expense / Cr ARO Liability based on the scheduled accretion amounts.
Dr Depreciation Expense / Cr Accumulated Depreciation for the ARC portion of the asset.
Entries required when cost estimates or timing change, so the books stay aligned with updated assumptions.
Adjustments that impact prior periods, with clear flags and documentation for auditors.
System-driven reversals that fully offset incorrect entries while keeping the original record for audit.
What This Means for Finance & Audit
Controllers, FP&A, and auditors all want the same thing: clear, defensible numbers. VIZIO ARO shows exactly how each obligation was measured, updated, and settledwith schedules you can export and review together.
- No hidden overrides: inputs, discount rates, and methods are visible.
- Audit-ready rollforwards: liability changes are traceable back to cost layers and postings.
- Exportable support: schedules and disclosure tables can be downloaded as Excel or PDF.