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Asset Retirement Obligation

12 Months Ended

Mar. 31, 2012

5. Asset Retirement Obligation

For the purpose of determining the fair value of the asset retirement obligation incurred during the year ended March 31, 2012, the Company assumed an inflation rate of 4%, an estimated average asset life of 25 years, and a credit adjusted risk free interest rate of 7.91%.

The following reconciles the value of the asset retirement obligation for the periods presented. This included a short term obligation of $133,000 and $127,000 as of March 31, 2012 and 2011, respectively, which was a component of accrued liabilities on the balance sheets:

	2012			2011

Asset retirement obligation, beginning of year	$	1,922,000		$	1,774,000
Liabilities settled		(401,000	)		(283,000	)
Liabilities incurred		133,000			49,000
Accretion		172,000			166,000
Revisions to estimates		—			216,000

Asset retirement obligation, end of year	$	1,826,000		$	1,922,000

Less current portion	$	(133,000	)	$	(127,000	)

Asset retirement obligation, less current portion	$	1,693,000		$	1,795,000

- 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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