What DRO Is and Why Customers Use It

Applies to: DRO (IAS 37) module   |   Audience: Customers   |   Last reviewed: 08/04/2026 

A plain-language overview of the DRO (IAS 37) module: what a Decommissioning and Restoration Obligation is, how ENFOS measures it, how it changes over time, and the benefits it delivers to IFRS-reporting customers. 

In this article 

• The problem DRO solves 

• What a DRO is 

• How ENFOS measures a DRO 

• How the provision changes over time 

• Asset and expense obligations 

• Where DRO lives in ENFOS 

• Benefits 

The problem DRO solves 

IFRS-reporting organizations carry long-term obligations to decommission assets and restore sites. Many track these provisions in spreadsheets, with estimates in one workbook, discount rates in another, and the numbers rebuilt by hand each period. That approach leaves little audit trail, few controls, and no reliable way to show how a balance changed from one period to the next. The DRO (IAS 37) module replaces it with a single, governed system for building, revising, and reporting these provisions. 

What a DRO is 

DRO stands for Decommissioning and Restoration Obligations. It is a provision for the future cost of taking an asset out of service and restoring the site around it, and is accounted under IAS 37, IAS 16, and IFRIC 1. 

When a customer has a legal or constructive obligation to clean up or dismantle something in the future, IFRS requires them to recognize that cost today as a provision on the balance sheet. Think of dismantling and removing the facility at the end of its life, plugging and abandoning a well, or restoring land back to its original state. The work happens years from now, but the obligation exists today, so it must be measured and carried on the books today. 

How ENFOS measures a DRO 

A DRO is measured at present value, not at its full future cost. The customer estimates the expected future cash flows for the work, and ENFOS discounts them to their value today. That present value is the provision, shown as the EPV (Expected Present Value) on the plan. 

How the provision changes over time 

Because the provision is discounted, it grows a little every period as time passes and the future gets closer. That steady growth is called the unwinding of the discount, and ENFOS' DRO module handles it automatically. 

The provision is also not static. As the customer's estimates change and as the discount rate moves, the obligation gets remeasured, and DRO tracks changes for each of them. 

Asset and expense obligations 

DRO comes in two flavors. Some obligations are tied to a physical asset, the customer's decommissioning, and some are pure remediation with no asset behind them. The platform handles both asset and expense types. See [LINK: Choosing the Asset or Expense subtype] for that distinction. 

Where DRO lives in ENFOS 

DRO is a new module inside the ENFOS Plan solution. It gives IFRS customers a single controlled place to build those provisions, revise them as estimates change, and see the balance roll forward automatically. 

Benefits 

• Removes spreadsheets and centralizes provisioning data, which speeds up period close. 

• Tightens governance with approvals, limits, and a full history behind every number. 

• Keeps reporting compliant with IFRS, which lowers the risk of a financial misstatement. 

Related articles 

• Core DRO concepts and terminology 

• Choosing the Asset or Expense subtype 

• Creating your first DRO plan 

• Understanding Change in Discount and Change in Estimate