On January 1, 2020, BMY Inc. moved into new leased premises and completed significant renovations to meet its needs. At the end of the 10-year lease, the company will be required to remove all its leasehold improvements and return the space back to what was originally there. BMY has assessed that it will cost $1,000,000 to remove all the improvements at the end of the lease. The appropriate discount rate for this obligation is 4%. The leasehold improvements will be depreciated over 10 years on a straight-line basis. What is the balance of the asset retirement obligation (ARO) as at December 31, 2021, assuming that BMY follows ASPE?

Question 4 options:

a)

$622,599

b)

$730,690

c)	$1,000,000

d)

$675,564