For a particular revision of an ARO layer, the calculated values (future cost, discounted cash flow, and net ARO) are determined.
The estimated cost to settle the obligation at the time of the ARO end, which is the Payment increased by the ARO inflation rate (compounded) from the ARO begin date until the end of the ARO, adjusted for probability. If this is not the first revision of the ARO, this value reflects the inflation shown on the prior revision(s) from inception up to the current revision booking date. (For instance, if the first revision has 2% inflation for 5 years, and the second revision has 3% inflation for 5 years, the future compounded cost will be 128% of the current cost.)
Discounted cash flow
The present value of Future Cost as of the ARO begin date (or the first of that month if the appropriate selection is made in System Options), using the ARO risk-free rate as the PV interest rate. Note that if this is a later revision and the risk-free rate has increased, the number may be negative, showing what the effect would have been if the higher rate were extrapolated back in time. An ARO liability never actually goes negative (becomes a debit).