The International Accountings Standards Board’s IAS 37 standard, Provisions, Contingent Liabilities, and Contingent Assets, covers AROs as part of its guidance for provisions. In general, the process is similar to account for an ARO under IAS 37. The primary difference has to do with the accretion rate.
The discount rate IAS 37 calls for is “a pre-tax rate (or rates) that reflect(s) current market assessments of the time value of money and the risks specific to the liability.” This is not defined exactly the same as FAS 143’s “credit-adjusted risk-free rate,” but the meaning is essentially the same to start with.
However, the reference to “current market assessments” means that regularly (at least yearly), the accretion rate must be updated to current values. To accomplish this, go to System Options, ARO tab, and check the box “Recalculate accretion when rate changes (IFRS),” then enter an updated accretion rate in the rates table above each time it needs to change.
Since the rate is changed regularly for all AROs, there is no need to differentiate the appropriate rate to use for revisions of the estimated cost.
Since provisions cover more than asset retirement obligations, the guidance provided is more general than that provided in FAS 143/ASC 410. In practice, preparers use similar methodologies for calculating estimated costs and making revisions.