[CPEO-BIF] Accounting for Pollution Remediation Obligations

[Lenny Siegel <lsiegel@cpeo.org>]

[The deadline for submitting comments on the Preliminary Views (PV)
document on Accounting and Financial Reporting for Pollution Remediation
Obligations, described below, is June 24, 2005.]

Governmental Accounting Standards Board
NEWS RELEASE 03/25/05
 
Governmental Accounting Standards Board Issues Preliminary Views on
Issues Related to Accounting and Financial Reporting for Pollution
Remediation Obligations



Norwalk, CT, March 25, 2005?The Governmental Accounting Standards Board
(GASB) has released a Preliminary Views (PV) document, Accounting and
Financial Reporting for Pollution Remediation Obligations, that
highlights the Board?s preliminary views concerning accounting and
financial reporting standards for pollution remediation obligations,
which are obligations to address the current or potential detrimental
effects of existing pollution by participating in pollution remediation
activities such as site assessments and cleanups.

The PV proposes that, once any one of five specified obligating events
occurs, governments would be required to estimate the components of
expected pollution remediation outlays using an ?expected cash flow?
measurement technique, and determine whether outlays for those
components should be accrued as a liability or, in limited instances,
capitalized when goods and services are acquired.

Most pollution remediation outlays would be accrued as a liability and
expenditure or expense, as appropriate, when a range of expected outlays
is reasonably estimable. If a government cannot reasonably estimate the
range of all components of the liability, it would recognize the
liability as the ranges of each component (for example, legal services,
site investigation, or required postremediation monitoring) become
reasonably estimable. The PV proposes a series of recognition
benchmarks?steps in the remediation process?that governments should
consider in determining when the components of pollution remediation
liabilities are reasonably estimable.

The provisions of the PV would be applied retroactively. Provisions for
an effective date will be provided if and when the PV is issued as an
Exposure Draft.

"The provisions in this PV fill a gap in the accounting guidance for
state and local governments,? said Wesley Galloway, manager of the
pollution remediation obligations project. ?If adopted, these provisions
will result in pollution remediation liabilities? being reported more
completely and consistently.?

The GASB encourages interested individuals and organizations to comment
on its proposals through written response. The deadline for submitting
comments is June 24, 2005, followed by a public hearing in San Antonio,
Texas, on June 29. Additional information about submitting a response or
a request to speak at the hearing is included in the Preliminary Views
document, which is available on the GASB?s website at www.gasb.org.

  

-- 


Lenny Siegel
Director, Center for Public Environmental Oversight
c/o PSC, 278-A Hope St., Mountain View, CA 94041
Voice: 650/961-8918 or 650/969-1545
Fax: 650/961-8918
<lsiegel@cpeo.org>
http://www.cpeo.org
_______________________________________________
Brownfields mailing list
Brownfields@list.cpeo.org
http://www.cpeo.org/mailman/listinfo/brownfields