Asset Retirement Obligations

15. Asset Retirement Obligations

The schedule below summarizes changes in Devon's asset retirement obligations.


	Year Ended December 31,
	2011	2010
	(In millions)
Asset retirement obligations as of beginning of year	$ 1,497	$ 1,513
Liabilities incurred	53	55
Liabilities settled	(82)	(129)
Revision of estimated obligation	25	194
Liabilities assumed by others	—	(269)
Accretion expense on discounted obligation	92	92
Foreign currency translation adjustment	(22)	41
Asset retirement obligations as of end of year	1,563	1,497
Less current portion	67	74
Asset retirement obligations, long-term	$ 1,496	$ 1,423

During 2010, Devon recognized a revision to its asset retirement obligations totaling $194 million. The increase was primarily due to an overall increase in abandonment cost estimates and a decrease in the discount rate used to present value the obligations.

During 2010, Devon reduced its asset retirement obligations by $269 million primarily for those obligations that were assumed by purchasers of Devon's Gulf of Mexico oil and gas properties.

- Definition

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.

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