Recent developments highlight recommended practices and procedures for setting environmental reserves

Recent developments have dramatically changed the nature of the process that companies should follow in setting their environmental reserves and, particularly, the documentation that companies should prepare and maintain to justify their environmental reserves. As part of a company's public fin...

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Bibliographic Details
Published in:Insights (Clifton, N.J.) N.J.), 2007-05, Vol.21 (5), p.12
Main Authors: Elliott, E. Donald, Klesh, Kevin J, Woldin, Sara M
Format: Article
Language:English
Subjects:
Accounting
Asbestos
Cost estimates
Disclosure (Securities law)
Documentation
Enforcement
Engineers
Environmental remediation
Environmental restoration
Fair value
Financial statements
GAAP
Laws, regulations and rules
Liability for environmental damages
Natural areas
Public companies
Reserves
Retirement
SEC filing requirements
Securities
Underground storage
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Summary:Recent developments have dramatically changed the nature of the process that companies should follow in setting their environmental reserves and, particularly, the documentation that companies should prepare and maintain to justify their environmental reserves. As part of a company's public financial filings, upon which investors rely to assess a company's overall financial health, environmental reserves identify expected environmental expenditures and liabilities. As such, environmental reserves must be developed in accordance with law and Generally Accepted Accounting Principles, established by the Financial Accounting Standards Board. On the enforcement side, a recent administrative order issued by the SEC demonstrates the increased scrutiny that the SEC appears to be bringing to bear on the process for setting environmental reserves. One of the key components of an environmental reserves setting program is the creation of a verifiable methodology. Recent developments in accounting standard-setting and securities enforcement highlight the need for companies to pay more attention to the process for formulating their environmental reserves.
ISSN:0894-3524