GASB's standard for state and local government financial reporting on pollution remediation obligations meets its objectives by providing more consistent, timely, and complete reporting, a review panel has found.
In an assessment of GASB Statement No. 49, Accounting and Financial Reporting for Pollution Remediation Obligations, a Financial Accounting Foundation post-implementation review (PIR) team received input from financial statement preparers, users, and auditors. The standard was issued in 2006.
The review team concluded in its report that:
- Statement No. 49 provides useful information to creditors and other financial statement users, who incorporate pollution remediation liabilities into their analyses when they are significant. For most governments, these liabilities are not considered significant.
- Statement No. 49 is understandable, can be applied as intended, and enables reliable reporting of information.
- Implementation and ongoing application costs related to the standard were not significant, and there were no significant, unanticipated consequences as a result of the standard.
The review also found that some governments sometimes struggle to determine whether they have met any of the obligating events described in the standard. Application of the expected cash flow technique required by the standard can be challenging for projects that span long periods, according to the report.
"The PIR report on Statement 49 tells us that, overall, the standard provides creditors and other users of financial statements with useful information," GASB Chairman David Vaudt said in a news release. "The GASB acknowledges the issues raised by some governments in applying certain provisions of the statement and will consider those issues when addressing the provisions in the future."