2 .
new accounting standards effective january 1 , 2003 , marathon adopted statement of financial accounting standards no .
143 201caccounting for asset retirement obligations 201d ( 201csfas no .
143 201d ) .
this statement requires that the fair value of an asset retirement obligation be recognized in the period in which it is incurred if a reasonable estimate of fair value can be made .
the present value of the estimated asset retirement cost is capitalized as part of the carrying amount of the long-lived asset .
previous accounting standards used the units-of-production method to match estimated future retirement costs with the revenues generated from the producing assets .
in contrast , sfas no .
143 requires depreciation of the capitalized asset retirement cost and accretion of the asset retirement obligation over time .
the depreciation will generally be determined on a units-of-production basis over the life of the field , while the accretion to be recognized will escalate over the life of the producing assets , typically as production declines .
for marathon , asset retirement obligations primarily relate to the abandonment of oil and gas producing facilities .
while assets such as refineries , crude oil and product pipelines , and marketing assets have retirement obligations covered by sfas no .
143 , certain of those obligations are not recognized since the fair value cannot be estimated due to the uncertainty of the settlement date of the obligation .
the transition adjustment related to adopting sfas no .
143 on january 1 , 2003 , was recognized as a cumulative effect of a change in accounting principle .
the cumulative effect on net income of adopting sfas no .
143 was a net favorable effect of $ 4 million , net of tax of $ 4 million .
at the time of adoption , total assets increased $ 120 million , and total liabilities increased $ 116 million .
the amounts recognized upon adoption are based upon numerous estimates and assumptions , including future retirement costs , future recoverable quantities of oil and gas , future inflation rates and the credit-adjusted risk-free interest rate .
changes in asset retirement obligations during the year were : ( in millions ) 2003 pro forma 2002 ( a ) .

<i>(In millions)</i>
2003
Pro forma2002<sup>(a)</sup>
Asset retirement obligations as of January 1
$339
$316
Liabilities incurred during 2003<sup>(b)</sup>
32
–
Liabilities settled during 2003<sup>(c)</sup>
(42)
–
Accretion expense (included in depreciation, depletion and amortization)
20
23
Revisions of previous estimates
41
–
Asset retirement obligations as of December 31
$390
$339

( a ) pro forma data as if sfas no .
143 had been adopted on january 1 , 2002 .
if adopted , income before cumulative effect of changes in accounting principles for 2002 would have been increased by $ 1 million and there would have been no impact on earnings per share .
( b ) includes $ 12 million related to the acquisition of khanty mansiysk oil corporation in 2003 .
( c ) includes $ 25 million associated with assets sold in 2003 .
in the second quarter of 2002 , the financial accounting standards board ( 201cfasb 201d ) issued statement of financial accounting standards no .
145 201crescission of fasb statements no .
4 , 44 , and 64 , amendment of fasb statement no .
13 , and technical corrections 201d ( 201csfas no .
145 201d ) .
effective january 1 , 2003 , marathon adopted the provisions relating to the classification of the effects of early extinguishment of debt in the consolidated statement of income .
as a result , losses of $ 53 million from the early extinguishment of debt in 2002 , which were previously reported as an extraordinary item ( net of tax of $ 20 million ) , have been reclassified into income before income taxes .
the adoption of sfas no .
145 had no impact on net income for 2002 .
effective january 1 , 2003 , marathon adopted statement of financial accounting standards no .
146 201caccounting for exit or disposal activities 201d ( 201csfas no .
146 201d ) .
sfas no .
146 is effective for exit or disposal activities that are initiated after december 31 , 2002 .
there were no impacts upon the initial adoption of sfas no .
146 .
effective january 1 , 2003 , marathon adopted the fair value recognition provisions of statement of financial accounting standards no .
123 201caccounting for stock-based compensation 201d ( 201csfas no .
123 201d ) .
statement of financial accounting standards no .
148 201caccounting for stock-based compensation 2013 transition and disclosure 201d ( 201csfas no .
148 201d ) , an amendment of sfas no .
123 , provides alternative methods for the transition of the accounting for stock-based compensation from the intrinsic value method to the fair value method .
marathon has applied the fair value method to grants made , modified or settled on or after january 1 , 2003 .
the impact on marathon 2019s 2003 net income was not materially different than under previous accounting standards .
the fasb issued statement of financial accounting standards no .
149 201camendment of statement 133 on derivative instruments and hedging activities 201d on april 30 , 2003 .
the statement is effective for derivative contracts entered into or modified after june 30 , 2003 and for hedging relationships designated after june 30 , 2003 .
the adoption of this statement did not have an effect on marathon 2019s financial position , cash flows or results of operations .
the fasb issued statement of financial accounting standards no .
150 201caccounting for certain financial instruments with characteristics of both liabilities and equity 201d on may 30 , 2003 .
the adoption of this statement , effective july 1 , 2003 , did not have a material effect on marathon 2019s financial position or results of operations .
effective january 1 , 2003 , fasb interpretation no .
45 , 201cguarantor 2019s accounting and disclosure requirements for guarantees , including indirect guarantees of indebtedness of others 201d ( 201cfin 45 201d ) , requires the fair-value .

Question: Analyse this data from a financial earnings document. what are total asset retirement obligations as of december 31 2002 and 2003 , in millions?
Choices:
371
706
431
729.0
51
Correct choice index: 3