Schedule 5.7 - Asset Retirement Obligation Liability - Detail Data

Similar to the Schedule 3C/E detail data forms, this form is used in the Financial Statements cycle to enter ARO liability transactions for land improvements, buildings amortized over 20 years, buildings amortized over 40 years, and buildings amortized over 40 years permanently removed from service. School boards should input ARO liability activity for these asset classes on an asset by asset basis in this schedule.

All non-land assets that appear on the detailed forms for Schedules 3E and 3D are loaded to this form. School boards should enter all transactions related to an ARO liability associated with each asset here. Once the form is saved, the values entered will be aggregated by asset class and displayed on the board-level form and report.

The ARO Liability Asset Type column displays the asset type from the associated TCA asset on Schedule 3C/3E. For instance, if a building with 40 years of service life has ARO liability, then the asset will appear as B40 on Schedule 3C, Schedule 3E and Schedule 5.7. For assets held for sale, “AHFS / ADV” is used for all asset classes instead of displaying the specific asset type from the Schedule 3D form. However, please note that only assets that have been fully transferred to financial assets will display “AHFS / ADV”. Assets that have only been partially transferred on Schedules 3C/3E will retain their original asset type on this form.

For details on each column in the asset level form, please refer to the board-level instructions for Schedule 5.7 - Asset Retirement Obligation Liability Continuity - the columns are the same on the detail form.

TCA-ARO assets fully transferred to Assets Held for Sale during the year

There is a known issue related to the asset type of an TCA asset with ARO that is fully transferred to assets held for sale during the reporting year. On Schedule 5.7 Detail, this asset will appear as “AHFS / ADV”, causing the ARO liability opening balance to be incorrectly classified as AHFS. To ensure that the opening balance of the ARO liability correctly reflects the original asset type (e.g. B40) and only the ending balance is presented as AHFS, the steps below must be followed. For illustration purpose, suppose a B40 asset with ARO is transferred to assets held for sale. The asset’s original Asset Serial Number is 1234.

1. On the Schedule 3C asset level form, create a new entry with Asset Serial Number 1234.1 to indicate this is related to the original asset.
2. On the Schedule 3C asset level form, record a “Transfer Between Asset Class” from #1234 to #1234.1, thus bringing the closing balance of #1234 to zero for both GBV and Accumulated Amortization. For #1234, remember to set Asset Transferred Link = #1234.1 and Asset Fully Transferred = Y.
3. On the Schedule 3C asset level form, record a “Transfer to Financial Assets” on #1234.1 to bring the closing balance of #1234.1 to zero for both GBV and Accumulated Amortization. Remember to set Asset Transferred Link = #1234.1 and Asset Fully Transferred = Y.
4. On the Schedule 3E asset level form, repeat Step 2 to bring the closing balance of #1234 to zero for ARO GBV and ARO Accumulated Amortization
5. On the Schedule 3E asset level form, repeat Step 3 to bring the closing balance of #1234.1 to zero for ARO GBV and ARO Accumulated Amortization
6. On the Schedule 3D asset level form, verify that only #1234.1 appears on the list with a correct in-year addition for both AHFS and AHFS-ARO. #1234 should not show up on Schedule 3D.
7. On the Schedule 5.7 asset level form, verify that both #1234 (asset type B40) and #1234.1 (asset type AHFS/ADV) show up in the list. The opening balance of the ARO liability appears on #1234. Use the Transfer Between Asset Class column to move the amount from #1234 to #1234.1, so the ending balance stays with #1234.1.

Once the above steps are followed, when the ARO Liability asset level data is aggregated to board level, the opening and closing balance of the particular asset will be classified in the correct asset type summary lines.