Asset retirement obligations

12 Months Ended

Dec. 31, 2023

Asset Retirement Obligation Disclosure [Abstract]

The Company capitalizes a restoration asset and recognizes a corresponding asset retirement obligation upon entering a contractual commitment with certain future environmental or restoration obligations of any disturbances caused at its leased plant facilities. The leased properties subject to these obligations are the New York Spoke plant, the Ontario Spoke plant, the Ontario Spoke warehouse, and the Germany Spoke plant and warehouse. The amounts recognized as asset retirement obligations are estimated using the Company's expected future costs of remediation discounted to the date of recognition, based on the lease term. Carrying value of the Company's restoration assets as of December 31, 2023 is $0.7 million (December 31, 2022: $0.2 million, October 31, 2022: $0.3 million, October 31, 2021: $0.2 million).

Restoration assets are amortized over the lease term with amortization expense recognized in Cost of sales in the consolidated statements of operations and comprehensive income (loss). Amortization expense for the year ended December 31, 2023 was $0.1 million (for the two months ended December 31, 2022: $0.0 million, for the year ended October 31, 2022: $0.1 million, 2021: $0.1 million). Changes in asset retirement obligations due to the passage of time are measured by recognizing accretion expense in Interest expense in the consolidated statements of operations and comprehensive income (loss).

A reconciliation of the Company’s asset retirement obligations for the years ended December 31, 2023, for the 2 months ended December 31, 2022, for the year ended October 31, 2022 and 2021 on a discounted basis are as follows:


	For the year ended December 31, 2023		For the 2 months ended December 31, 2022		For the year ended October 31, 2022		For the year ended October 31, 2021
Balance, beginning of the year	$	0.4	$	0.4	$	0.4	$	—
Non-cash additions	0.5		—		—		0.4

Accretion of liability and foreign exchange	0.1		—		—		—


Balance, end of year	$	1.0	$	0.4	$	0.4	$	0.4

The discount rate utilized to determine the above accrued obligation was the credit adjusted risk free rate relevant in each jurisdiction as at the time of recognition of the obligation (0.37% - 10.96%). The total undiscounted amount of the obligation is $1.6 million.