FASAB Aims for Consistent Reporting on Asbestos-Related Liabilities, Equipment Cleanup Costs
The Accounting and Auditing Policy Committee (AAPC) of the Federal Accounting Standards Advisory Board (FASAB) issued a pair of technical releases intended to achieve consistent reporting among federal entities of asbestos-related liabilities and cleanup costs associated with equipment. Each technical release is effective immediately.
Statement of Federal Financial Accounting Technical Release (TR) 10, Implementation Guidance on Asbestos Cleanup Costs Associated with Facilities and Installed Equipment, addresses implementation questions regarding the consistent application of Technical Bulletin 2006-1, Recognition and Measurement of Asbestos-Related Cleanup Costs, as it relates to asbestos cleanup costs associated with facilities and installed equipment. As federal agencies develop approaches to recognizing liabilities for cleanup costs associated with asbestos, FASAB said it has become apparent that an implementation strategy is needed to ensure consistent reporting of asbestos-related liabilities. FASAB said many federal agencies continue to struggle with interpreting existing guidance and determining a cost-effective implementation methodology.
The guidance clarifies existing accounting requirements. It also creates a framework for identifying assets containing asbestos, assessing the assets to collect information, and/or developing key assumptions to estimate asbestos cleanup costs for federal facilities and installed equipment.
TR 11, Implementation Guidance on Cleanup Costs Associated with Equipment, focuses on when cleanup costs should be recognized as an environmental liability and when they should be expensed as a cost of routine operation. The guidance includes two examples—one example is associated with equipment cleanup when a liability should be recognized, and one is associated with equipment cleanup when the costs should be expensed as routine operations. This technical release provides steps to help federal entities consistently apply existing standards. The guidance will also help federal entities provide reasonable estimates of cleanup costs associated with the disposal of equipment assets, when required.
All AAPC technical releases are available at fasab.gov/aapc/technicl.html.
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