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ASC 410-30-45-1 through ASC 410-30-45-6 details other presentation matters related to accrued liabilities and assets related to environmental remediation obligations. The guidance details the following points:
  • Balance sheet classification

    Where a classified balance sheet is presented, a reporting entity should present separately the current and noncurrent portions of the environmental remediation liability recorded, based on the expected timing of settlement.
  • Right of setoff

    If all conditions in ASC 210, Balance Sheet, are met, assets and liabilities related to environmental remediation activities may be reported net. However, as discussed in ASC 410-30-45-2, the FASB observed that it would be rare, if ever, that all of the conditions would be met for environmental remediation liabilities, the related insurance, and potential third-party recoveries.
  • Operating expense classification

    As discussed in ASC 410-30-45-4, environmental remediation costs are required to be charged against operations since the events underlying the incurrence of the obligation relate to the reporting entity's operations. Any recoveries should be reflected in the same income statement line as the original expense. To the extent a reporting entity has earmarked assets for funding its environmental liabilities, the earnings on those assets should be reported as investment income.
  • Discontinued operations

    A reporting entity should classify environmental remediation expenses and recoveries as discontinued operations if they meet the requirements in ASC 205-20, Discontinued Operations.
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