Now let's model out our asset retirement obligation liability. We're gonna start with the same ending balance that we started for the asset side. That's 37.2.

And the accounting for the asset retirement obligation liability is actually very similar to how we model a finance lease liability. We're gonna do a base calculation, start with the beginning balance of 37.2. We're gonna charge accrued interest, and for this, we need an assumption of a discount rate. We're gonna take that assumption from our sources and uses tab, and the assumption is 6%. And this should be of course, in line with the risk of the project, and ideally it would be estimated as the average cost of debt of the project. We're gonna lock that in and multiply times the beginning balance for that year, and we get an accrued interest of 2.2.

Next, we have an asset retirement payment, however, these payments happen toward the end of the life of the project, but we're still gonna link this up to our assumptions. We wanna make sure that this payment is negative, so we'll start with a negative sign and we're gonna link this up to our sources and uses that.

And here we have our termination cost of zero in the very first year of our timeline.

Now we can sum this up and we have, of course, a higher ending balance after the first year because of the accrued interest. Let's go ahead and take these four lines and copy them all the way until the end of our operational period. And as you can see, initially the balance goes up because of the accrued interest charge, but eventually, towards the last three years of the project, we have our payments, which bring the balance down to zero. It's also worth noting that the accrued interest charged during the construction phase will be also included in our soft costs.