Recycling / E-waste

Capital Expense Consulting

Team Capex defines our recycling / e-waste service as the method of removing an asset from service, physically and on paper.

Recycling / E-waste service:

  • coordinating the removal of the capital asset
  • ¬†through properly managing the accounting systems associated with the asset through its ARO
  • while utilizing our vendor network to perform the physical recycling, repurposing, or disposal of the asset
Responsibility of our service:
  • To physically remove the capital asset
  • To dispose of the asset in the most environmentally friendly way possible
  • To manage the Asset Retirement Obligation
An Asset Retirement Obligation (ARO) is a legal obligation associated with the retirement of a tangible long-lived asset in which the timing or method of settlement may be conditional on a future event, the occurrence of which may not be within the control of the entity burdened by the obligation.
  • In the United States, ARO accounting is specified by Statement of Financial Accounting Standards (SFAS, or FAS) 143, which is Topic 410-20 in the Accounting Standards Codification published by the Financial Accounting Standards Board.
  • Entities covered by International Financial Reporting Standards (IFRS) apply a standard called IAS 37 to AROs, where the AROs are called “provisions”.
  • ARO accounting is particularly significant for remediation work needed to restore a property, such as decontaminating a manufacturing facility site, removing IT computer networking infrastructure or removal of improvements to a site.
  • It does not apply to unplanned cleanup costs, such as costs incurred as a result of an accident.
  • Firms must recognize the ARO liability in the period in which it was incurred, such as at the time of acquisition or construction.
  • The liability equals the present value of the expected cost of retirement/remediation.
  • An asset equal to the initial liability is added to the balance sheet, and depreciated over the life of the asset.
  • The result is an increase in both assets and liabilities, while the total expected cost is recognized over time, with the accrual steadily increasing on a compounded basis.