Norwalk, CT, January 31, 2006—The Governmental Accounting Standards Board (GASB) today issued an Exposure Draft intended to provide guidance and consistency with respect to the accounting and reporting of obligations and costs related to pollution remediation. The proposal reflects the Board’s intention to ensure that certain costs and long-term obligations not specifically addressed by current governmental accounting standards will be included in financial reports.
The proposed standards build on a Preliminary Views draft that was released for public comment in March 2005.
Specifically, the proposal sets forth the key circumstances under which a government would be required to report a liability related to pollution remediation. According to the proposal, a government would have to estimate its expected outlays for pollution remediation if any of the following occur:
In addition to the liabilities, expenses, and expenditures which would be estimated using an “expected cash flows” measurement technique and be reported in the financial statements, the proposed standard would require governments to disclose information about their pollution clean up efforts in the notes to the financial statements.
"Today’s proposal intends to improve financial reporting by fostering more transparent and more consistent accounting that encourages comparability,” said Robert Attmore, Chairman of the GASB. “The proposed standard also enhances the ability of users to assess a government’s obligations by requiring both earlier reporting of obligations and recognition of obligations that may not have previously been reported.”
The requirements of this proposed Statement would be effective for financial statements for periods beginning after June 15, 2007.
A copy of the proposal may be downloaded from the GASB’s website at www.gasb.org.
The GASB encourages interested individual and organizations to comment on this Exposure Drafts. The comment deadline is May 1, 2006. Comment letters should be submitted electronically to firstname.lastname@example.org or via regular mail to:
Director of Research
Governmental Accounting Standards Board
401 Merritt 7
PO Box 5116
Norwalk, CT 06856-5116
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.