Standard Guide for Disclosure of Environmental LiabilitiesTranslate name
STANDARD published on 1.10.2016
Designation standards: ASTM E2173-16
Publication date standards: 1.10.2016
The number of pages: 16
Approximate weight : 48 g (0.11 lbs)
Country: American technical standard
Category: Technical standards ASTM
asset retirement obligations, capital stewardship, corporate governance reporting, counterparty risk, decommissioning, disclosure, environmental liability, financial assurance, financial reporting, financial statement, pollution remediation obligations, remediation, reporting entity, sustainability reporting,, ICS Number Code 13.020.10 (Environmental management)
|Significance and Use|
4.1 Significance—Since the release of 4.1.1 Number and scope of federal, state, local, and non-U.S. environmental and financial reporting laws and their implementing regulations;
4.1.2 Number and scope of treaties signed by the United States, as well as the implementing laws and regulations; parties in these treaties include multilateral organizations and Native American tribes;
4.1.3 Judicial decisions clarifying the impact of laws, regulations, and treaties;
4.1.4 Costs to comply with environmental regulations;
4.1.5 Number of known chemical compounds (see Chemical Abstracts Service REGISTRYSM, which contains over 113 million unique organic and inorganic substances);
4.1.6 Knowledge about benefits and effects of chemical compounds on human health, ecological receptors, and the environment, such as toxicology studies (see National Library of Medicine's TOXNET database at www.nlm.nih.gov);
4.1.7 Number and efficacy of remedial technologies;
4.1.8 Experience with assessing and remediating environmental conditions;
4.1.9 Financial impact of counterparty failure; and
4.1.10 Investor interest in the impact of these trends and factors on their investments.
4.2 Concurrently, the issuers of generally accepted accounting principles (GAAP) and financial reporting standards have been evolving. While the Securities and Exchange Commission (SEC) was established in 1934, FASB was created in 1973, GASB in 1984, Note 1: Many of these trends and factors, as well as the changes to 4.3 Uses—This guide is intended for use on a voluntary basis by a reporting entity that provides financial and qualitative disclosure regarding environmental liabilities. Disclosure is integrated with preceding elements of financial statements, namely recognition, measurement, and presentation of environmental liabilities, as noted in . (Full explanation of this framework can be found in FASB Concepts Statement 8, September 2010.)
4.3.1 The degree and type of disclosure depends on the scope and objective of the financial statements. Such statements may not always be audited and prepared for the public domain.
4.3.2 For example, users may need to make non-public disclosures for the benefit of investors, lenders, regulators, tax authorities, key customers and joint venture partners.
4.3.3 Users of this guide should be aware that shareholder concerns, contractual obligations, financial assurance requirements, court decisions, and regulatory directives may affect their flexibility in use of this guide.
4.4.1 The following principles are an integral part of this guide and are intended to be referred to in resolving any ambiguity or dispute regarding the interpretation of disclosures regarding environmental liabilities.
4.4.2 Uncertainty Not Eliminated—Although a 4.4.3 Disclosure Dependent on Circumstances—Not every environmental liability warrants the same level of detail in its disclosure. Disclosure will be guided by the scope and objective of the financial statement, and accordingly, by the materiality of the environmental liability and the level of information available.
4.4.4 Comparison with Subsequent Disclosures—Subsequent disclosures that convey different information regarding the extent or magnitude of the 4.4.5 Not Exhaustive—Appropriate disclosure does not necessarily mean an exhaustive disclosure; discretion and professional judgment is used by estimators, auditors, and the reporting entity's management in setting limits on the preparation cost, materiality, and volume of information worth disclosing as environmental liabilities.
Note 2: For each entity, there is a tradeoff between displaying detailed information and identifying reliable and accurate insights that are useful to user decisions.
4.4.6 Assessment of Risk—As the 4.4.7 Improved Capital Stewardship—Disclosure, along with the preceding steps of recognition, measurement, and presentation, provides context for environmental liabilities and may improve the defensible allocation of capital to resolving those liabilities as efficiently as possible. Over time, an entity may find it valuable or even essential to demonstrate leadership in cost efficiency for understanding, controlling, preventing, and reducing environmental liabilities. The need for intermittent internal presentations may transform into the need for regular public disclosures as an entity acquires environmentally impaired assets or other environmental liabilities. An entity may prefer to make the ongoing investment in competent and continuous data collection and interpretation to draw internal managerial attention toward measuring and ensuring progress in discharging the liabilities as efficiently as possible.
1.1 Purpose—The purpose of this guide is to provide a series of options or instructions consistent with good commercial and customary practice in the United States for environmental liability disclosures accompanying audited and unaudited 1.2 Objectives—The objectives of this guide are to determine the conditions warranting disclosure and the content of appropriate disclosure.
|2. Referenced Documents|
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