Mark Your Calendar: GASB Public Hearings on Pollution Remediation Obligations
The Government Accounting Standards Board (GASB) is holding a public hearing on June 29, 2005 regarding the preliminary views (PV) document Accounting and Financial Reporting for Pollution Remediation Obligations. The public hearing will be held in conjunction with the annual meeting of the Government Finance Officers Association (GFOA) at the Henry B. Gonzalez Convention Center in San Antonio, Texas beginning at 9 a.m.
The PV addresses financial reporting issues associated with pollution remediation obligations addressing current or potential detrimental effects of existing pollution by participating in pollution remediation activities including site assessments and cleanups. The PV’s provisions are intended to help close the guidance gap for state and local governments on the issue of pollution remediation. Adopting of the PV’s provisions is expected to result in more complete and consistent reporting of pollution remediation liabilities.
The PV proposes that governments be required to estimate the expected pollution remediation component outlays using an “expected cash flow” measurement technique once any one of five specified obligating events occurs. Most component outlays should be accrued as liabilities and expenditure or expense when a range of outlays is reasonably estimable. If a reasonable estimate of the range of all the components is not available, estimates of each individual component would be recognized. A series of recognition benchmarks governments should consider in determining whether the components of pollution remediation liabilities are reasonably estimable are also included in the PV. In limited instances, the component outlays could be capitalized when goods and services are acquired.
The provision of the PV would be applied retroactively. Provisions for an effective date will be provided when, and if, the PV is issued as an Exposure Draft.
Individuals and organizations wishing to make an oral presentation at the public hearing should provide a written notice of intent and a copy of written comments addressing the issues discussed in the PV to the GASB by June 17, 2005. Written comments from individuals and organizations that do not intend to participate in the public hearing should be sent to the GASB by June 24, 2005. Additional information about submitting a response or a request to speak at the hearing is included in the Preliminary Views document, available on the GASB web site.