Note 9 - Asset Retirement Obligation
|12 Months Ended|
Dec. 31, 2020
|Notes to Financial Statements|
|Asset Retirement Obligation Disclosure [Text Block]||
ASC Topic 410-20, “Asset Retirement and Environmental Obligations, Asset Retirement Obligations” requires the recording of a liability in the period in which an asset retirement obligation (ARO) is incurred, in an amount equal to the discounted estimated fair value of the obligation that is capitalized. In each subsequent fiscal quarter, this liability is accreted up to the final retirement cost. The determination of the ARO is based on an estimate of the future cost to remove and decontaminate the Company’s facility at TRIC upon closure. The estimated fair value of the closure costs was based on vendor quotes to remove and decontaminate the McCarran facility in accordance with the Company’s closure plan as filed with the State of Nevada in its “Application for the Recycling of Hazardous Waste, by Written Determination” in 2016. The discounted estimated fair value of the closure costs was $0.7 million and the obligation was recorded as of March 31, 2017, when the obligation was deemed to have occurred. Offsetting this ARO was an asset retirement cost of the same amount that was capitalized.
The Company entered into a facility closure trust agreement in October 2017 for the benefit of the Nevada Division of Environmental Protection (NDEP), an agency of the Nevada Division of Conservation and Natural Resources. Funds deposited in the trust were to be available, when and if needed, for potential decontamination and hazardous material cleanup in connection with the closure and/or post-closure care of the facility. Due to the change in the primary use of the Company's McCarran, Nevada facility, the Written Determination issued to the Company requiring the Facility Closure Trust deposit was terminated by the NDEP on December 9, 2020. As a result of this termination, the Trust account was closed and the Trustee reimbursed the Company the entire balance of the Trust account. As a result of the elimination of the Trust obligation and the refund of the balance, the original amount of the estimated closure cost that was capitalized and the accumulated accretion were written off. Accretion for the ARO for the year ended December 31, 2019 was $46,000.
The entire disclosure for an asset retirement obligation and the associated long-lived asset. An asset retirement obligation is a legal obligation associated with the disposal or retirement from service of a tangible long-lived asset that results from the acquisition, construction or development, or the normal operations of a long-lived asset, except for certain obligations of lessees.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef