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Reporting Effects of SFAS 143 on Nuclear Decommissioning Costs

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  • Richard Schroeder
  • Suzanne Sevin
  • Kathryn Yarbrough

Abstract

SFAS 143, Accounting for Asset Retirement Obligations, has the potential to cause significant economic consequences to firms impacted by its provisions. BK&L (Boatsman, J. R.; Khurana, I. K.; Loudder, M. L. “The Economic Implications of Proposed Changes in the Accounting for Nuclear Decommissioning Costs,” Accounting Horizons, 14 (2), June 2000, pp. 211–233) suggests that companies would be required to record materially increased assets, liabilities, and expenses which may subsequently cause a significant impact to commonly used financial ratios. BK&L developed predictions of the pro forma effect on assets, liabilities, and expenses due to SFAS 143 adoption by nuclear power utilities. This study examines the actual financial statement effect on BK&L's sample firms due to the adoption of SFAS 143. Results indicate that concern voiced over the standard's requirement to capitalize asset retirement obligations and the related asset, and to record additional expenses by nuclear power companies may have been unfounded. Copyright International Atlantic Economic Society 2005

Suggested Citation

  • Richard Schroeder & Suzanne Sevin & Kathryn Yarbrough, 2005. "Reporting Effects of SFAS 143 on Nuclear Decommissioning Costs," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 11(4), pages 449-458, November.
    • Handle: RePEc:kap:iaecre:v:11:y:2005:i:4:p:449-458:10.1007/s11294-005-2280-x
    DOI: 10.1007/s11294-005-2280-x
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    Cited by:

    1. Kwangheon Park & Seunghyun Son & Jinhyuk Oh & Sunkuk Kim, 2022. "Sustainable Decommissioning Strategies for Nuclear Power Plants: A Systematic Literature Review," Sustainability, MDPI, vol. 14(10), pages 1-21, May.

    More about this item

    Keywords

    M41;

    JEL classification:

    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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