Norwalk, CT, June 6, 2005The Governmental Accounting Standards Board (GASB) will hold a public hearing on its preliminary views (PV) document, Accounting and Financial Reporting for Pollution Remediation Obligations which was released on March 25, 2005. The hearing is scheduled for June 29, 2005 at the Henry B. Gonzalez Convention Center, San Antonio, Texas beginning at 9:00 am. It will be held in conjunction with the annual meeting of the Government Finance Officers Association (GFOA).
Individuals or organizations that want to make an oral presentation at the public hearing should provide to the GASB, by June 17, 2005, a written notification of that intent and a copy of written comments addressing the issues discussed in the PV. The Board intends to schedule all respondents who want to make oral presentations. Observers are welcome at the public hearing and are urged to submit written comments.
The PV addresses financial reporting issues associated with 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 intent of the provisions of the PV is to fill a gap in the accounting guidance for state and local governments. If adopted, these provisions are expected to result in pollution remediation liabilities being reported more completely and consistently.
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 a 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.
Written comments from individuals or 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, which is available on the GASB's website at www.gasb.org.
About the Governmental Accounting Standards Board
The GASB is the independent, not-for-profit organization formed in 1984 that establishes and improves financial accounting and reporting standards for state and local governments. Its seven members are drawn from the Board's diverse constituency, including preparers and auditors of government financial statements, users of those statements and members of the academic community. More information about the GASB can be found at its website www.gasb.org.