DTE Energy 2008 Annual Report Download - page 13

Intangible assets relating to capitalized software are classified as Property, plant and equipment and the related amortization is included in
Accumulated depreciation on the Consolidated Statements of Financial Position. We capitalize the costs associated with computer software we
develop or obtain for use in our business. We amortize intangible assets on a straight-line basis over the expected period of benefit, primarily
15 years. Intangible assets amortization expense was $6 million in each of the years 2008, 2007 and 2006. The gross carrying amount and
accumulated amortization of intangible assets at December 31, 2008 were $96 million and $47 million, respectively. The gross carrying amount
and accumulated amortization of intangible assets at December 31, 2007 were $90 million and $43 million, respectively. Amortization expense
for intangible assets is estimated to be $6 million annually for 2009 through 2013.
Asset Retirement Obligations
We record asset retirement obligations in accordance with Statement of Financial Accounting Standards (SFAS) No. 143, Accounting for Asset
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etirement Obligations and Financial Accounting Standards Board Interpretation No. (FIN) 47, Accounting for Conditional Asset Retirement
Obligations, an interpretation of FASB Statement No. 143. We have conditional retirement obligations for gas pipeline retirement costs. To a
lesser extent, we have conditional retirement obligations at certain service centers, compressor and gate stations. The Company recognizes such
obligations as liabilities at fair market value at the time the associated assets are placed in service. Fair value is measured using expected future
cash outflows discounted at our credit-adjusted risk-free rate.
The adoptions of SFAS No. 143 and FIN 47 resulted primarily in timing differences in the recognition of legal asset retirement costs that the
Company is currently recovering in rates. We defer such differences under SFAS No. 71, Accounting for the Effects of Certain Types of
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egulation.
No liability has been recorded with respect to lead-based paint, as the quantities of lead-based paint in our facilities are unknown. In addition,
there is no incremental cost for demolitions of lead-based paint facilities vs. non-lead-based paint facilities and no regulations currently exist
requiring any type of special disposal of items containing lead-based paint.
A reconciliation of the asset retirement obligation for 2008 follows:
Long-Lived Assets
Our long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may
not be recoverable. If the carrying amount of the asset exceeds the expected future cash flows generated by the asset, an impairment loss is
recognized resulting in the asset being written down to its estimated fair value. Assets to be disposed of are reported at the lower of the carrying
amount or fair value less costs to sell.
Excise and Sales Taxes
We record the billing of excise and sales taxes as a receivable with an offsetting payable to the applicable taxing authority, with no impact on
the Consolidated Statements of Operations.
Deferred Debt Costs
The costs related to the issuance of long-term debt are deferred and amortized over the life of each debt issue. In accordance with MPSC
regulations, the unamortized discount, premium and expense related to debt redeemed with a refinancing are amortized over the life of the
replacement issue.
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(in Millions)
Asset retirement obligations at January 1, 2008 $ 109
Accretion 6
Liabilities settled (3)
Asset retirement obligations at December 31, 2008 $112