XML 49 R30.htm IDEA: XBRL DOCUMENT v3.22.2
ASSET RETIREMENT OBLIGATIONS
 3 Months Ended
Mar. 31, 2022
Asset Retirement Obligation Disclosure [Abstract]  
ASSET RETIREMENT OBLIGATIONS ASSET RETIREMENT OBLIGATIONS
The Company has asset retirement obligations as a result of its farming production facilities which are often located in leased spaces. The Company builds vertical farming production facilities within leased space including growing racks, electrical systems, water systems, storage areas, and production lines. The lease agreements often require the Company to return the leased space to its original state upon vacating the space at the end of the lease term.
The Company estimates asset retirement obligations which includes the total cost of disposing of the farming production facility and equipment from the leased space at the end of the lease term. The Company records the asset retirement obligations at fair value in accordance with ASC 410–20, Asset Retirement Obligations. The asset retirement obligation is valued using the Company’s incremental borrowing rate and is accreted over the expected lease term. The Company capitalizes the future cost of the retirement activities as part of the carrying amount of the farming production facilities at the in–service date. The asset is then depreciated on a straight–line basis over the expected lease term of the space.
The following table provides all changes to the company’s asset retirement obligations.
In thousandsDecember 31, 2021December 31, 2020
Asset retirement obligations at the beginning of the year$588 $204 
Liabilities incurred889 334 
Accretion expenses50 50 
Total asset retirement obligations at year end$1,527 $588 
Accretion expense for the years ended December 31, 2021 and 2020 amounted to $50 thousand and $50 thousand, respectively
ASSET RETIREMENT OBLIGATIONS
The Company has asset retirement obligations as a result of its farming production facilities which are often located in leased spaces. The Company builds vertical farming production facilities within leased space including growing racks, electrical systems, water systems, storage areas, and production lines. The lease agreements often require the Company to return the leased space to its original state upon vacating the space at the end of the lease term.
The Company estimates asset retirement obligations which includes the total cost of disposing of the farming production facility and equipment from the leased space at the end of the lease term. The Company records the asset retirement obligations at fair value in accordance with ASC 410–20, Asset Retirement Obligations. The asset retirement obligation is valued using the Company’s incremental borrowing rate and is accreted over the expected lease term. The Company capitalizes the future cost of the retirement activities as part of the carrying amount of the farming production facilities at the in–service date. The asset is then depreciated on a straight–line basis over the expected lease term of the space.
The following table provides all changes to the company’s asset retirement obligations.
In thousands
Asset retirement obligations at March 31, 2021$588 
Liabilities incurred889 
Accretion expenses50 
Asset retirement obligations at December 31, 20211,527 
Liabilities incurred— 
Accretion expenses63 
Asset retirement obligations at March 31, 2022$1,590 
Accretion expense for the three months ended March 31, 2022 and 2021 amounted to $63 thousand and $50 thousand, respectively.