Explain current generally-accepted accounting principles, as well as US Federal and Canadian legislation, which provide guidance to those measuring and disclosing environmental liabilities. This proposed Standard will describe - primarily via process flow diagrams and checklists - how to determine if any of the five different types of environmental liabilities exist for any environmental condition, and how to apply the unique terms obligating events and recognition benchmarks specified in accounting literature to the recognition and derecognition of a given liability.
In 2010, the Financial Accounting Standards Board (FASB) reaffirmed their conceptual framework (Statement 8: Financial Accounting Concepts, September 2010), including the four "elements of financial statements": recognition, measurement, presentations and disclosure. ASTM Standards exist already for measurement (E2137) and presentation/disclosure (E2173), but do not cover the initial (and terminal) steps of identifying when and how a liability exists. FASB Concepts Statement 8 notes that "recognition" is the initial step of defining a liability. Generally-accepted accounting principles are developed by and for the accounting community-of-practice; this proposed Standard will provide unique instructions to estimate preparers, based on best practice, to improve capital stewardship and engage accounting experts in the explaining environmental liabilities more reliably (and consistently with pension, product warranty, post retiree medical and other contingent liabilities). Users will be companies and government agencies responsible for environmental obligations, along with the legal, accounting and engineering/consulting specialists supporting them. Other users include judges and grand juries seeking authoritative processes, and securities regulators seeking best practices in the public domain. The users of E2137 and E2173 are expected to overlap with this proposed Standard.
Keywordsenvironmental liabilities:environmental remediation liabilities:asset retirement obligations:decommissioning liabilities
The title and scope are in draft form and are under development within this ASTM Committee.Back to Top
Ballot Item Approved as E3123-2017 and Pending Publication