lecielbleu

In my understanding, the Accretion expense is calculated by multiplying the balance of the recorded liability by the company’s credit-adjusted discount rate each year, and is simply the amortization of the present value discount associated with the ARO’s initial recording; hence, as an amortization, it should be considered as non-cash charges, and won't affect the cash flow. It is treated as interest simply for the purpose to calculate interest coverage ratio. I am not sure whether I got a right understanding, and hope it helps if my understanding is correct.