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This excerpt taken from the FTWR 10-Q filed Nov 9, 2006. Asset Retirement Obligations We account for asset retirement obligations in accordance with SFAS No. 143, Accounting for Asset Retirement Obligations. We recognize liabilities for asset retirement obligations relating to the estimated costs of removing network equipment from its leased colocation sites, as stipulated in the related lease agreements. The asset retirement obligations are recognized in the period in which they are incurred if a reasonable estimate of their fair value can be made. The associated asset retirement costs are capitalized as part of the carrying amount of the related long lived assets and depreciated on a straight-line basis over their estimated useful life of ten years. We calculate the net present value of the retirement obligation assuming a credit-adjusted, risk-free interest rate of 12%. We also assume the settlement date for removing the network equipment 25
from its leased colocation sites to be ten years from the date the asset is placed into service, which is the expected term of the related leases. We monitor the estimates and assumptions used in determining our asset retirement obligations and adjust them accordingly if deemed necessary. This excerpt taken from the FTWR 8-K filed Oct 26, 2006. Asset Retirement Obligations The Company recognizes liabilities for asset retirement obligations relating to the estimated costs of removing network equipment from its leased colocation sites, as stipulated in the related lease agreements. The asset retirement obligations are recognized in the period in which they are incurred if a reasonable estimate of their fair value can be made. The associated asset retirement costs are capitalized as part of the carrying amount of the related long-lived assets and depreciated on a straight-line basis over their estimated useful life of ten years. As of December 31, 2005 and June 30, 2006 and 2005, the Company’s asset retirement obligations were $571, $944 and $389, respectively. As of December 31, 2004, the Company’s asset retirement obligations were not material.
A summary of the asset retirement obligations activity is as follows:
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