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State-of-the-Practice Environmental Liability
Analysis
The essential characteristics of effective
environmental liability cost analysis include
reliability, understandability, predictive value
and consistency. Most organizations with
environmental obligations have concerns about
the effectiveness of their liability estimates
because of the need for frequent revisions and a
general lack of reliability. Cost analysis based
on traditional practices has offered little
insight for budgeting purposes and has not been
sufficiently relevant or understandable to the
many functions within the organization that rely
on it.
Let's Face
the Facts: Traditional environmental liability
cost analysis has missed the mark.
State-of-the-practice environmental liability
analysis uses a robust framework of generic and
entity-specific engineering, accounting and
economic estimating contexts and constraints.
The multiple organizational goals and objectives
of the estimate are clearly defined and
incorporated into the selection of appropriate
standards and correct practices.
And a consistent
framework is used so that estimates prepared for
differing purposes (settlement negotiations or
recognition, valuation and reporting in annual
financial statements, for example) are wholly
consistent even if not numerically equivalent.
Our environmental
remediation cost and decision analysis services
reflect recent changes in several significant
standards and recommended practices, including:
-
AACE Total
Cost Management Framework
-
FASB
Statement of Financial Accounting Standards
No. 157, Fair Value Measurements
-
GASB Statement No. 49,
Pollution Remediation
Obligations
-
ASTM
Standard Guide for Disclosure of
Environmental Liabilities (E 2173-07)
-
FASB
Interpretation No. 47, Accounting for
Conditional Asset Retirement Obligations
-
ASTM
Standard Guide for Estimating Monetary Costs
and Liabilities for Environmental Matters (E
2137-06)
How We Can
Help
If you have a difficult
environmental liability issue that cannot be
solved in-house, or just want to understand what
constitutes best practice in liability analysis,
Risk Strategics can help. Our environmental
liability solutions include:
-
Design and
execution of appropriate and cost beneficial
solutions for transitioning to next
generation environmental liability cost
analysis.
-
Training
and training materials.
-
Documentation support.
-
Quality
assurance and review activities.
-
Project and
change management.
-
Technical
support including evaluation of current
liability analysis processes, scoping and
documentation of necessary changes, and
preparing liability analyses using best
practices.
-
Design and
execution of environmental risk mitigation,
transfer, and elimination strategies.
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