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Asset Retirement Obligations
 12 Months Ended
Dec. 31, 2011
Asset Retirement Obligations  
Asset Retirement Obligations

 

13. Asset Retirement Obligations

        Bunge has asset retirement obligations with carrying amounts totaling $19 million and $43 million at December 31, 2011 and 2010, respectively. Asset retirement obligations relate to the restoration of leased land to its original state and removal of the plants upon termination of the leases, and in its edible oil products segment, related to the removal of certain storage tanks associated with edible oil refining facilities.

        The change in carrying value of asset retirement obligations in 2011 consisted of a $22 million decrease of the initial obligation, related to fair value adjustments, primarily in the agribusiness segment, an increase of $4 million for accretion expense and a decrease of $6 million related to currency translation. The decrease in the initial obligation resulted in a reduction of property, plant and equipment of $6 million and recognition of approximately $12 million of reduction in cost of goods sold in Bunge's consolidated statement of income for the year ended December 31, 2011. The change in carrying value of asset retirement obligations in 2010 consisted of additions of $6 million in the sugar and bioenergy segment related to the acquisition of Moema, a $3 million increase of the initial obligation, which resulted from a decrease in the discount rate used to calculate the present value ($2 million in the fertilizer segment and $1 million in the agribusiness segment), an increase of $3 million for accretion expense, an increase of $2 million related to currency translation and a decrease of $42 million in the fertilizer segment due to the sale of the nutrients assets (see Note 3).