# ASC Topic 410: Asset Retirement and Environmental Obligations Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/410/) Study and research edition. Verify current requirements with the official source. Summaries, enrichment, and tags are machine-generated study aids. Paragraph html preserves source markup; snippet is abbreviated. Pending content is not necessarily effective. Tables and mathematical or amendment markup are retained as HTML where Markdown would lose structure. Source downloaded (UTC): 2026-09-10T00:20:32.113Z to 2026-09-10T00:22:29.648Z Record version: sha256:4710acdbe1a11ca323043adb480c2262a9dbb6c512281670b14ccf1738dc6ba6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## Machine-generated topic summary ASC 410 covers two distinct kinds of retirement/cleanup obligations. Subtopic 410-20 requires an entity to recognize, at fair value in the period incurred, a legal obligation to retire a tangible long-lived asset arising from its acquisition, construction, development, or normal operation, and to capitalize an equal asset retirement cost in the asset's carrying amount, with later accretion (credit-adjusted risk-free rate) and revisions to estimated cash flows (410-20-25-4; 410-20-25-5; 410-20-30-1; 410-20-35-3). Subtopic 410-30 instead applies the ASC 450-20 loss contingency model site by site to environmental remediation liabilities under CERCLA, RCRA, and analogous laws, accruing the entity's allocable share of joint and several liability when a loss is probable and reasonably estimable and expensing it in operating income, with separate recognition of probable recoveries. ASC 410-10 is purely navigational (410-10-05-2), and 410-980 adds regulatory asset/liability treatment for rate-regulated entities whose rate recovery of retirement costs differs in timing from GAAP cost recognition (410-980-25-2). The unifying idea: a retirement obligation is recognized up front at fair value and capitalized into the asset, whereas a remediation obligation from past contamination is a contingency expensed as incurred. Source downloaded (UTC): 2026-09-10T00:20:32.113Z to 2026-09-10T00:20:38.088Z Record version: sha256:df51df81fa0ac72c86e5b2226ed537d966707a4d20cb217b242a88b803acdd6e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 410-10: Asset Retirement and Environmental Obligations — Overall ### Machine-generated study aids ```json { "summary": "ASC 410-10 is a purely navigational \"Overall\" subtopic within the Asset Retirement and Environmental Obligations Topic. Its sole purpose is to explain the difference between Subtopic 410-20 (asset retirement obligations, the associated asset retirement cost, and environmental remediation liabilities arising from normal operation of a long-lived asset) and Subtopic 410-30 (environmental remediation liabilities generally). It contains no independent recognition or measurement rules.", "key_points": [ "Topic 410 comprises three Subtopics: Overall (410-10), Asset Retirement Obligations (410-20), and Environmental Obligations (410-30) (410-10-05-1).", "The sole purpose of the Overall Subtopic is to explain the differences between the other two Subtopics (410-10-05-2).", "Subtopic 410-20 governs the liability for an asset retirement obligation and the associated asset retirement cost, and also an environmental remediation liability that results from the normal operation of a long-lived asset (see 410-20-55-7).", "Subtopic 410-30 governs accounting and financial reporting for environmental remediation liabilities (i.e., those not arising from normal operation of a long-lived asset) (410-10-05-2).", "410-10 itself prescribes no recognition, measurement, presentation, or disclosure requirements; the operative guidance resides in 410-20 and 410-30." ], "categories": [ "Recognition", "Contingencies and guarantees", "Inventory and PP&E" ], "audience_level": "introductory", "student_note": "The exam trap is picking the wrong subtopic: if the environmental liability arises from the normal operation of a long-lived asset (e.g., legally required removal of contaminated equipment at retirement), it is an ARO under 410-20; remediation of past contamination or improper operation falls under 410-30. 410-10 itself has no substantive rules.", "related_topics": [ "410-20", "410-30", "450-20", "420", "360-10" ], "key_concepts": [ "asset retirement obligation", "asset retirement cost", "environmental remediation liability", "long-lived asset", "normal operation", "scope navigation" ] } ``` Source downloaded (UTC): 2026-09-10T00:20:32.113Z to 2026-09-10T00:20:32.113Z Record version: sha256:48fb897fc6d2aed679d9282325e8e71ad45a7c25dc65ab630c5df938afd1fe67 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 410-10-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/410/10/#00-status) SEC content: no ##### [410-10-00-1](https://asc.understandingaccounting.org/asc/410/10/#410-10-00-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:20:32.113Z to 2026-09-10T00:20:32.113Z Record version: sha256:24daf369fd766ca0517d05d460cffee1705739a2578d94f6d1c52beb346a9b1c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. No updates have been made to this subtopic. Source downloaded (UTC): 2026-09-10T00:20:34.133Z to 2026-09-10T00:20:34.133Z Record version: sha256:dca9f7bbecf86fb186dabcb6b9719bce3693530d367dfba09250e4dc41c2afed Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 410-10-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/410/10/#05-overview-and-background) SEC content: no ##### [410-10-05-1](https://asc.understandingaccounting.org/asc/410/10/#410-10-05-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:20:34.133Z to 2026-09-10T00:20:34.133Z Record version: sha256:eac90cabe47557b1792db4fa53ebe18946b82666ab5a0dadbdc4f68a86aea8c5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Asset [Retirement](https://asc.understandingaccounting.org/glossary/r/#retirement "The other-than-temporary removal of a long-lived asset from service. That term encompasses sale, abandonment, recycling, or disposal in some other manner. However, it does not encompass the temporary idling of a long-lived asset. After an entity retires an asset, that asset is no longer under the control of that entity, no longer in existence, or no longer capable of being used in the manner for which the asset was originally acquired, constructed, or developed.") and Environmental Obligations Topic includes the following Subtopics: 1. a Overall 2. b Asset Retirement Obligations 3. c Environmental Obligations. ##### [410-10-05-2](https://asc.understandingaccounting.org/asc/410/10/#410-10-05-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:20:34.133Z to 2026-09-10T00:20:34.133Z Record version: sha256:fc3a49370fc1fe21f3cfa17c8192b9861ce07326d61c9fce2d90d6f6b83abf1f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The sole purpose of the Overall Subtopic is to explain the differences between the other two Subtopics. Subtopic 410-20 provides guidance on accounting for and financial reporting of a liability for an asset retirement obligation (and the associated asset retirement cost) and an environmental remediation liability that results from the normal operation of a long-lived asset (see paragraph [410-20-55-7](https://asc.understandingaccounting.org/asc/410/20/#410-20-55-7)). Subtopic 410-30 provides guidance on accounting for and financial reporting of environmental remediation liabilities. Source downloaded (UTC): 2026-09-10T00:20:40.400Z to 2026-09-10T00:21:17.061Z Record version: sha256:af056de0675ec3af592ae003d0b223f3dca6330d1718bc7d04627f0d1393589e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 410-20: Asset Retirement and Environmental Obligations — Asset Retirement Obligations ### Machine-generated study aids ```json { "summary": "ASC 410-20 governs legal obligations associated with the retirement of tangible long-lived assets that arise from acquisition, construction, development, and/or normal operation of the asset, including environmental remediation resulting from normal operations. An entity recognizes the fair value of the ARO liability in the period incurred if fair value can be reasonably estimated, and simultaneously capitalizes an equal asset retirement cost in the carrying amount of the related long-lived asset (410-20-25-4; 410-20-25-5). Fair value is normally measured with an expected present value technique discounted at a credit-adjusted risk-free rate, with later changes recognized as accretion expense and as revisions to estimated cash flows (410-20-30-1; 410-20-35-3).", "key_points": [ "An entity recognizes an ARO at fair value in the period incurred if a reasonable estimate can be made; otherwise recognition is deferred until a reasonable estimate is possible, and an ARO on an acquired asset is recognized at the acquisition date as if incurred then (410-20-25-4; 410-20-25-16).", "Upon initial recognition, the entity capitalizes an asset retirement cost by increasing the carrying amount of the related long-lived asset by the same amount as the liability, and allocates that cost to expense over the asset's useful life using a systematic and rational method (410-20-25-5; 410-20-35-2).", "A conditional ARO must be recognized before the event requiring or waiving performance occurs; the obligation to stand ready is unconditional, and uncertainty about timing/method and about whether performance will be enforced affects measurement, not recognition (410-20-25-7; 410-20-25-13 through 25-15); when the conditional aspect has two outcomes and no information on which is more probable, 50 percent is used for each (410-20-25-14).", "Fair value is usually measured with an expected present value technique, discounting expected cash flows (including third-party costs, overhead, profit margin, inflation, and a market-risk premium) at a credit-adjusted risk-free rate (410-20-30-1; 410-20-55-13).", "Subsequent changes arise from (a) passage of time, measured by the interest method using the credit-adjusted risk-free rate in effect when that layer was initially measured and recognized as accretion expense (an operating item), and (b) revisions to timing or amount of undiscounted cash flows, measured before which accretion must first be recorded (410-20-35-3 through 35-5; 410-20-45-1).", "Upward revisions in undiscounted estimated cash flows are discounted at the current credit-adjusted risk-free rate; downward revisions are discounted at the rate that existed when the original liability was recognized (or a weighted-average rate if the layer cannot be identified) (410-20-35-8).", "Required disclosures include a description of the AROs and related assets, the fair value of assets legally restricted for settling AROs, and a reconciliation of the beginning and ending carrying amount showing liabilities incurred, liabilities settled, accretion expense, and revisions in estimated cash flows; if fair value cannot be reasonably estimated, that fact and the reasons must be disclosed (410-20-50-1; 410-20-50-2)." ], "categories": [ "Recognition", "Initial measurement", "Subsequent measurement", "Fair value" ], "audience_level": "intermediate", "student_note": "Exams love the conditional ARO trap: a low likelihood of enforcement or an indefinitely deferrable obligation still requires recognition (uncertainty goes into measurement, not recognition) — the only true recognition deferral is when fair value cannot be reasonably estimated. Also memorize the asymmetric rate rule: upward cash flow revisions use the current credit-adjusted risk-free rate, downward revisions use the original (or weighted-average) rate.", "related_topics": [ "410-30", "360-10", "420", "842-10", "820-10", "980-10" ], "key_concepts": [ "asset retirement obligation", "asset retirement cost", "conditional asset retirement obligation", "expected present value technique", "credit-adjusted risk-free rate", "accretion expense", "legal obligation", "normal operation of a long-lived asset" ] } ``` Source downloaded (UTC): 2026-09-10T00:20:40.400Z to 2026-09-10T00:20:40.400Z Record version: sha256:2656223cf3fcfd398ff03c7cc685152d0a0530eff4c92eb96e765c01af0c686a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 410-20-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/410/20/#00-status) SEC content: no ##### [410-20-00-1](https://asc.understandingaccounting.org/asc/410/20/#410-20-00-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:20:40.400Z to 2026-09-10T00:20:40.400Z Record version: sha256:aaeaaf1814f9ba361027b0cdc9c091abd09dc316596bce030bd3f914cfbec312 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following table identifies the changes made to this Subtopic.
ParagraphActionAccounting Standards UpdateDate
Commencement Date of the Lease (Commencement Date)AddedAccounting Standards Update No. 2016-0202/25/2016
ContractAddedAccounting Standards Update No. 2014-0905/28/2014
CustomerAddedAccounting Standards Update No. 2014-0905/28/2014
Fair Value (3rd def.)AddedAccounting Standards Update No. 2012-0410/01/2012
LeaseAddedAccounting Standards Update No. 2016-0202/25/2016
Lease PaymentsAddedAccounting Standards Update No. 2016-0202/25/2016
Lease TermAddedAccounting Standards Update No. 2016-0202/25/2016
LesseeAddedAccounting Standards Update No. 2016-0202/25/2016
LessorAddedAccounting Standards Update No. 2016-0202/25/2016
RevenueAddedAccounting Standards Update No. 2014-0905/28/2014
Underlying AssetAddedAccounting Standards Update No. 2016-0202/25/2016
Variable Lease PaymentsAddedAccounting Standards Update No. 2016-0202/25/2016
410-20-15-2AmendedAccounting Standards Update No. 2016-0202/25/2016
410-20-15-3AmendedAccounting Standards Update No. 2016-0202/25/2016
410-20-25-1 through 25-3A
SupersededAccounting Standards Update No. 2024-0203/29/2024
410-20-25-10AmendedMaintenance Update 2018-02 (PDF)02/02/2018
410-20-50-1AmendedAccounting Standards Update No. 2024-0311/04/2024
410-20-55-26AmendedAccounting Standards Update No. 2024-0203/29/2024
410-20-55-27AmendedAccounting Standards Update No. 2012-0410/01/2012
410-20-55-28AmendedAccounting Standards Update No. 2014-0905/28/2014
410-20-55-44AmendedAccounting Standards Update No. 2016-0202/25/2016
410-20-55-66AmendedAccounting Standards Update No. 2012-0410/01/2012
Source downloaded (UTC): 2026-09-10T00:20:43.312Z to 2026-09-10T00:20:43.312Z Record version: sha256:586115292b631167ce4a55a687cd68d19ac087cc5f50e365e44cee5c53152dd2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 410-20-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/410/20/#05-overview-and-background) SEC content: no ##### [410-20-05-1](https://asc.understandingaccounting.org/asc/410/20/#410-20-05-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:20:43.312Z to 2026-09-10T00:20:43.312Z Record version: sha256:325e32ee2be49cef12c64f4c80ef3afa64adaf8cbea31a152dc45f301add364a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic establishes accounting standards for recognition and measurement of a liability for an [asset retirement obligation](https://asc.understandingaccounting.org/glossary/a/#asset-retirement-obligation "An obligation associated with the retirement of a tangible long-lived asset.") and the associated [asset retirement cost](https://asc.understandingaccounting.org/glossary/a/#asset-retirement-cost "The amount capitalized that increases the carrying amount of the long-lived asset when a liability for an asset retirement obligation is recognized."). This Subtopic also addresses the accounting for an environmental remediation liability that results from the normal operation of a long-lived asset. ##### [410-20-05-2](https://asc.understandingaccounting.org/asc/410/20/#410-20-05-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:20:43.312Z to 2026-09-10T00:20:43.312Z Record version: sha256:7ddf04c748e40df790caa26654153b7894892fdbd93c387a5385275bb0da4948 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph not used](https://asc.understandingaccounting.org/updates/page-1833002/). Source downloaded (UTC): 2026-09-10T00:20:45.653Z to 2026-09-10T00:20:45.653Z Record version: sha256:e49e30da13f75514707023b1be4ea06c7687d12264a10729550a4997e108d42e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 410-20-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/410/20/#15-scope-and-scope-exceptions) SEC content: no #### Entities ##### [410-20-15-1](https://asc.understandingaccounting.org/asc/410/20/#410-20-15-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:20:45.653Z to 2026-09-10T00:20:45.653Z Record version: sha256:be8e03d84ab05d180fb9cf34aff99d38c0457483756ccee23f8253ec6e7eef61 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in this Subtopic applies to all entities, including rate-regulated entities that meet the criteria for application of Subtopic 980-10, as provided in paragraph [980-10-15-2](https://asc.understandingaccounting.org/asc/980/10/#980-10-15-2). Paragraphs [980-340-25-1](https://asc.understandingaccounting.org/asc/340/980/#340-980-25-1) and [980-405-25-1](https://asc.understandingaccounting.org/asc/405/980/#405-980-25-1) provide specific conditions that must be met to recognize a regulatory asset and a regulatory liability, respectively. (See paragraphs [410-20-55-1 through 55-12](https://asc.understandingaccounting.org/asc/410/20/#410-20-55-1) and [410-20-55-21 through 55-22](https://asc.understandingaccounting.org/asc/410/20/#410-20-55-21) for implementation guidance) #### Transactions ##### [410-20-15-2](https://asc.understandingaccounting.org/asc/410/20/#410-20-15-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:20:45.653Z to 2026-09-10T00:20:45.653Z Record version: sha256:0d0c4c18e99f68733e5e385a5837482c0bc817a29ad82615cdc1c2f68a4e02e9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in this Subtopic applies to the following transactions and activities: 1. a [Legal obligations](https://asc.understandingaccounting.org/glossary/l/#legal-obligation "An obligation that a party is required to settle as a result of an existing or enacted law, statute, ordinance, or written or oral contract or by legal construction of a contract under the doctrine of promissory estoppel.") associated with the [retirement](https://asc.understandingaccounting.org/glossary/r/#retirement "The other-than-temporary removal of a long-lived asset from service. That term encompasses sale, abandonment, recycling, or disposal in some other manner. However, it does not encompass the temporary idling of a long-lived asset. After an entity retires an asset, that asset is no longer under the control of that entity, no longer in existence, or no longer capable of being used in the manner for which the asset was originally acquired, constructed, or developed.")of a tangible long-lived asset that result from the acquisition, construction, or development and (or) the normal operation of a long-lived asset, including any legal obligations that require [disposal](https://asc.understandingaccounting.org/glossary/d/#disposal "Related to the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 and the Resource Conservation and Recovery Act of 1976: under the Resource Conservation and Recovery Act of 1976, the discharge, deposit, injection, dumping, spilling, leaking, or placing of any solid waste or hazardous waste into or on any land or water so that such solid waste or hazardous waste or any constituent thereof may enter the environment or be emitted into the air or discharged into any waters, including groundwaters. Similarly under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 with regard to hazardous substances.") of a replaced part that is a component of a tangible long-lived asset. 2. b An environmental remediation liability that results from the normal operation of a long-lived asset and that is associated with the retirement of that asset. The fact that partial settlement of an obligation is required or performed before full retirement of an asset does not remove that obligation from the scope of this Subtopic. If environmental contamination is incurred in the normal operation of a long-lived asset and is associated with the retirement of that asset, then this Subtopic will apply (and Subtopic 410-30 will not apply) if the entity is legally obligated to treat the contamination. 3. c A conditional obligation to perform a retirement activity. Uncertainty about the timing of settlement of the [asset retirement obligation](https://asc.understandingaccounting.org/glossary/a/#asset-retirement-obligation "An obligation associated with the retirement of a tangible long-lived asset.") does not remove that obligation from the scope of this Subtopic but will affect the measurement of a liability for that obligation (see paragraph [410-20-25-10](https://asc.understandingaccounting.org/asc/410/20/#410-20-25-10)). 4. d Obligations of a [lessor](https://asc.understandingaccounting.org/glossary/l/#lessor "An entity that enters into a contract to provide the right to use an underlying asset for a period of time in exchange for consideration.") in connection with an [underlying asset](https://asc.understandingaccounting.org/glossary/u/#underlying-asset "An asset that is the subject of a lease for which a right to use that asset has been conveyed to a lessee. The underlying asset could be a physically distinct portion of a single asset.") that meet the provisions in (a). 5. e The costs associated with the retirement of a specified asset that qualifies as historical waste equipment as defined by EU Directive 2002/96/EC. (See paragraphs [410-20-55-23 through 55-30](https://asc.understandingaccounting.org/asc/410/20/#410-20-55-23) and Example 4 \[paragraph [410-20-55-63](https://asc.understandingaccounting.org/asc/410/20/#410-20-55-63)\] for illustration of this guidance.) Paragraph [410-20-55-24](https://asc.understandingaccounting.org/asc/410/20/#410-20-55-24) explains how the Directive distinguishes between new and historical waste and provides related implementation guidance. ##### [410-20-15-3](https://asc.understandingaccounting.org/asc/410/20/#410-20-15-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:20:45.653Z to 2026-09-10T00:20:45.653Z Record version: sha256:8caa2131024b66a2e302c155f2f8146959a90a2ce7cd22b0bcfbc986dfc6a938 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in this Subtopic does not apply to the following transactions and activities: 1. a Obligations that arise solely from a plan to sell or otherwise dispose of a long-lived asset covered by Subtopic 360-10. 2. b An environmental remediation liability that results from the improper operation of a long-lived asset (see Subtopic 410-30). Obligations resulting from improper operations do not represent costs that are an integral part of the tangible long-lived asset and therefore should not be accounted for as part of the cost basis of the asset. For example, a certain amount of spillage may be inherent in the normal operations of a fuel storage facility, but a catastrophic accident caused by noncompliance with an entity's safety procedures is not. The obligation to clean up the spillage resulting from the normal operation of the fuel storage facility is within the scope of this Subtopic. The obligation to clean up after the catastrophic accident results from the improper use of the facility and is not within the scope of this Subtopic. 3. c Activities necessary to prepare an asset for an alternative use as they are not associated with the retirement of the asset. 4. d Historical waste held by private households. (The guidance in this paragraph does not pertain to an asset retirement obligation in the scope of this Subtopic.) For guidance on accounting for historical electronic equipment waste held by private households for obligations associated with Directive 2002/96/EC on Waste Electrical and Electronic Equipment adopted by the European Union, see Subtopic 720-40. 5. e Obligations of a [lessee](https://asc.understandingaccounting.org/glossary/l/#lessee "An entity that enters into a contract to obtain the right to use an underlying asset for a period of time in exchange for consideration.") in connection with an [underlying asset](https://asc.understandingaccounting.org/glossary/u/#underlying-asset "An asset that is the subject of a lease for which a right to use that asset has been conveyed to a lessee. The underlying asset could be a physically distinct portion of a single asset."), whether imposed by a [lease](https://asc.understandingaccounting.org/glossary/l/#lease "A contract, or part of a contract, that conveys the right to control the use of identified property, plant, or equipment (an identified asset) for a period of time in exchange for consideration.") or by a party other than the lessor, that meet the definition of either [lease payments](https://asc.understandingaccounting.org/glossary/l/#lease-payments "See paragraph 842-10-30-5 for what constitutes lease payments from the perspective of a lessee and a lessor.") or [variable lease payments](https://asc.understandingaccounting.org/glossary/v/#variable-lease-payments "Payments made by a lessee to a lessor for the right to use an underlying asset that vary because of changes in facts or circumstances occurring after the commencement date, other than the passage of time.") in Subtopic 842-10. Those obligations shall be accounted for by the lessee in accordance with the requirements of Subtopic 842-10. However, if obligations of a lessee in connection with an underlying asset, whether imposed by a lease or by a party other than the lessor, meet the provisions in paragraph [410-20-15-2](https://asc.understandingaccounting.org/asc/410/20/#410-20-15-2) but do not meet the definition of either lease payments or variable lease payments in Subtopic 842-10, those obligations shall be accounted for by the lessee in accordance with the requirements of this Subtopic. 6. f An obligation for asbestos removal that results from the other-than-normal operation of an asset. Such an obligation may be subject to the provisions of Subtopic 410-30. 7. g Costs associated with complying with funding or assurance provisions. Paragraph [410-20-35-9](https://asc.understandingaccounting.org/asc/410/20/#410-20-35-9) otherwise addresses the measurement effects of funding and assurance provisions. 8. h Obligations associated with maintenance, rather than retirement, of a long-lived asset. 9. i The cost of a replacement part that is a component of a long-lived asset. Source downloaded (UTC): 2026-09-10T00:20:53.384Z to 2026-09-10T00:20:53.384Z Record version: sha256:5edcadf30368d9d3ef7dad5609b287fa19eb6e89d70e792139d3ae1605252d4e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 410-20-25: 25 Recognition [Read section](https://asc.understandingaccounting.org/asc/410/20/#25-recognition) SEC content: no #### Background for Recognition ##### [410-20-25-1](https://asc.understandingaccounting.org/asc/410/20/#410-20-25-1) Pending content: yes Source downloaded (UTC): 2026-09-10T00:20:53.384Z to 2026-09-10T00:20:53.384Z Record version: sha256:0d83668bc540ce3bc3a63c07ab9c7c50e6205bdee0c7ed3991c972edf485a66f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph 35 of FASB Concepts Statement No. 6, Elements of Financial Statements, defines a liability as follows {Note: The indented text below is reproduced from FASB Concepts Statement No. 6 and includes editorial changes for internal consistency within the Codification}. - Liabilities are probable future sacrifices of economic benefits arising from present obligations of a particular entity to transfer assets or provide services to other entities in the future as a result of past transactions or events. Transition date:(P) December 16, 2024; (N) December 16, 2025Transition guidance: [105-10-65-9](https://asc.understandingaccounting.org/asc/105/10/#105-10-65-9)
Editor's Note: Paragraph 410-20-25-1 will be will be superseded upon transition, together with its heading.
> Background for Recognition
[Paragraph superseded by Accounting Standards Update No. 2024-02.](https://asc.understandingaccounting.org/updates/asu-2024-02/) ##### [410-20-25-2](https://asc.understandingaccounting.org/asc/410/20/#410-20-25-2) Pending content: yes Source downloaded (UTC): 2026-09-10T00:20:53.384Z to 2026-09-10T00:20:53.384Z Record version: sha256:09fe1ebc612b67831d28a760f8319878f55cb83ee0ad5034327e656637e483a2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Probable is used with its usual general meaning, rather than in a specific accounting or technical sense (such as that in paragraph [450-20-25-1](https://asc.understandingaccounting.org/asc/450/20/#450-20-25-1)), and refers to that which can reasonably be expected or believed on the basis of available evidence or logic but is neither certain nor proved (Webster's New World Dictionary). Its inclusion in the definition is intended to acknowledge that business and other economic activities occur in an environment characterized by uncertainty in which few outcomes are certain (see paragraphs 44 through 48 of FASB Concepts Statement No. 6). Transition date:(P) December 16, 2024; (N) December 16, 2025Transition guidance: [105-10-65-9](https://asc.understandingaccounting.org/asc/105/10/#105-10-65-9) [Paragraph superseded by Accounting Standards Update No. 2024-02.](https://asc.understandingaccounting.org/updates/asu-2024-02/) ##### [410-20-25-3](https://asc.understandingaccounting.org/asc/410/20/#410-20-25-3) Pending content: yes Source downloaded (UTC): 2026-09-10T00:20:53.384Z to 2026-09-10T00:20:53.384Z Record version: sha256:da3d2ab1f9fbfb7a6658d409d4288736a30e69428431d42041b161ee883cf977 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. As stated in the preceding paragraph, the definition of a liability in Concepts Statement 6 uses the term _probable_ in a different sense than it is used in paragraph [450-20-25-1](https://asc.understandingaccounting.org/asc/450/20/#450-20-25-1). As used in Topic 450, probable requires a high degree of expectation. The term probable in the definition of a liability, however, is intended to acknowledge that business and other economic activities occur in an environment in which few outcomes are certain. Transition date:(P) December 16, 2024; (N) December 16, 2025Transition guidance: [105-10-65-9](https://asc.understandingaccounting.org/asc/105/10/#105-10-65-9) [Paragraph superseded by Accounting Standards Update No. 2024-02.](https://asc.understandingaccounting.org/updates/asu-2024-02/) ##### [410-20-25-3A](https://asc.understandingaccounting.org/asc/410/20/#410-20-25-3A) Pending content: yes Source downloaded (UTC): 2026-09-10T00:20:53.384Z to 2026-09-10T00:20:53.384Z Record version: sha256:5d5698e3a540ca6a0b59cb88bce3fe5b9a13a048ef721f78066b503054b55c6b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [410-20-40-3](https://asc.understandingaccounting.org/asc/410/20/#410-20-40-3) states that providing assurance that an entity will be able to satisfy its asset retirement obligation does not satisfy or extinguish the related liability. Transition date:(P) December 16, 2024; (N) December 16, 2025Transition guidance: [105-10-65-9](https://asc.understandingaccounting.org/asc/105/10/#105-10-65-9) [Paragraph superseded by Accounting Standards Update No. 2024-02.](https://asc.understandingaccounting.org/updates/asu-2024-02/) #### Fair Value Is Reasonably Estimated ##### [410-20-25-4](https://asc.understandingaccounting.org/asc/410/20/#410-20-25-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:20:53.384Z to 2026-09-10T00:20:53.384Z Record version: sha256:6bd7fc363473dde37b4714c435d6c236c1c78aec03414b97cbc9f15f4118cfce Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity shall recognize the fair value of a liability for an [asset retirement obligation](https://asc.understandingaccounting.org/glossary/a/#asset-retirement-obligation "An obligation associated with the retirement of a tangible long-lived asset.") in the period in which it is incurred if a reasonable estimate of fair value can be made. If a reasonable estimate of fair value cannot be made in the period the asset retirement obligation is incurred, the liability shall be recognized when a reasonable estimate of fair value can be made. If a tangible long-lived asset with an existing asset retirement obligation is acquired, a liability for that obligation shall be recognized at the asset's acquisition date as if that obligation were incurred on that date. ##### [410-20-25-5](https://asc.understandingaccounting.org/asc/410/20/#410-20-25-5) Pending content: no Source downloaded (UTC): 2026-09-10T00:20:53.384Z to 2026-09-10T00:20:53.384Z Record version: sha256:db49a7dd257f970a35353b2171a4e81a5a9635ac5901026f89b30155294949c2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Upon initial recognition of a liability for an asset retirement obligation, an entity shall capitalize an [asset retirement cost](https://asc.understandingaccounting.org/glossary/a/#asset-retirement-cost "The amount capitalized that increases the carrying amount of the long-lived asset when a liability for an asset retirement obligation is recognized.") by increasing the carrying amount of the related long-lived asset by the same amount as the liability. Paragraph [835-20-30-5](https://asc.understandingaccounting.org/asc/835/20/#835-20-30-5) explains that capitalized asset retirement costs do not qualify as expenditures for purposes of applying Subtopic 835-20. ##### [410-20-25-6](https://asc.understandingaccounting.org/asc/410/20/#410-20-25-6) Pending content: no Source downloaded (UTC): 2026-09-10T00:20:53.384Z to 2026-09-10T00:20:53.384Z Record version: sha256:bb800a33b145e35f7c18f97061591dfda51bd1fcfa8f244f8b4ec436fc5a7ad4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity shall identify all its asset retirement obligations. An entity has sufficient information to reasonably estimate the fair value of an asset retirement obligation if any of the following conditions exist: 1. a It is evident that the fair value of the obligation is embodied in the acquisition price of the asset. 2. b An active market exists for the transfer of the obligation. 3. c Sufficient information exists to apply an expected present value technique. #### Obligations with Uncertainty in Timing or Method of Settlement ##### [410-20-25-7](https://asc.understandingaccounting.org/asc/410/20/#410-20-25-7) Pending content: no Source downloaded (UTC): 2026-09-10T00:20:53.384Z to 2026-09-10T00:20:53.384Z Record version: sha256:daf881185329ba9763fd2386ca28945d6fcdca435ed3cf044d0adc3fa816e716 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The obligation to perform the asset retirement activity is unconditional even though uncertainty exists about the timing and (or) method of settlement. Thus, the timing and (or) method of settlement may be conditional on a future event. Accordingly, an entity shall recognize a liability for the fair value of a [conditional asset retirement obligation](https://asc.understandingaccounting.org/glossary/c/#conditional-asset-retirement-obligation "A legal obligation to perform an asset retirement activity in which the timing and (or) method of settlement are conditional on a future event that may or may not be within the control of the entity.") if the fair value of the liability can be reasonably estimated. In some cases, sufficient information about the timing and (or) method of settlement may not be available to reasonably estimate fair value. An expected present value technique incorporates uncertainty about the timing and method of settlement into the fair value measurement. Uncertainty is factored into the measurement of the fair value of the liability through assignment of probabilities to cash flows. ##### [410-20-25-8](https://asc.understandingaccounting.org/asc/410/20/#410-20-25-8) Pending content: no Source downloaded (UTC): 2026-09-10T00:20:53.384Z to 2026-09-10T00:20:53.384Z Record version: sha256:c847a974fa73abcb98b777cb87a704ec9ede065777a650f05282c84163a19fed Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity would have sufficient information to apply an expected present value technique and therefore an asset retirement obligation would be reasonably estimable if either of the following conditions exists: 1. a The settlement date and method of settlement for the obligation have been specified by others. For example, the law, regulation, or contract that gives rise to the [legal obligation](https://asc.understandingaccounting.org/glossary/l/#legal-obligation "An obligation that a party is required to settle as a result of an existing or enacted law, statute, ordinance, or written or oral contract or by legal construction of a contract under the doctrine of promissory estoppel.") specifies the settlement date and method of settlement. In this situation, the settlement date and method of settlement are known and therefore the only uncertainty is whether the obligation will be enforced (that is, whether performance will be required). In certain cases, determining the settlement date for the obligation that has been specified by others is a matter of judgment that depends on the relevant facts and circumstances. For example, a contract that provides the entity with an ability to extend its term through renewal should be evaluated to determine whether the settlement date should take into consideration renewal periods. Uncertainty about whether performance will be required does not defer the recognition of an asset retirement obligation because a legal obligation to stand ready to perform the retirement activities still exists, and it does not prevent the determination of a reasonable estimate of fair value because the only uncertainty is whether performance will be required. 2. b The information is available to reasonably estimate all of the following: 1. 1 The settlement date or the range of potential settlement dates 2. 2 The method of settlement or potential methods of settlement (The term _potential methods of settlement_ refers to methods of settling the obligation that are currently available to the entity. Therefore, uncertainty about future methods yet to be developed would not prevent the entity from estimating the fair value of the asset retirement obligation.) 3. 3 The probabilities associated with the potential settlement dates and potential methods of settlement. (The entity should have a reasonable basis for assigning probabilities to the potential settlement dates and potential methods of settlement to reasonably estimate the fair value of the asset retirement obligation. If the entity does not have a reasonable basis of assigning probabilities, it is expected that the entity would still be able to reasonably estimate fair value when the range of time over which the entity may settle the obligation is so narrow and (or) the cash flows associated with each potential method of settlement are so similar that assigning probabilities without having a reasonable basis for doing so would not have a material impact on the fair value of the asset retirement obligation.) ##### [410-20-25-9](https://asc.understandingaccounting.org/asc/410/20/#410-20-25-9) Pending content: no Source downloaded (UTC): 2026-09-10T00:20:53.384Z to 2026-09-10T00:20:53.384Z Record version: sha256:96e3513609468e25c93e9cd5e21757a4baeb3483ef2d872d18710e123f947d73 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In many cases, the determination as to whether the entity has the information to reasonably estimate the fair value of the asset retirement obligation is a matter of judgment that depends on the relevant facts and circumstances. It is expected that the narrower the range of time over which the entity may settle the obligation and the fewer potential methods of settlement the entity has available to it, the more likely it is that the entity will have the information to reasonably estimate the fair value of an asset retirement obligation. For an illustration of this guidance, see Example 3 (paragraph [410-20-55-47](https://asc.understandingaccounting.org/asc/410/20/#410-20-55-47)). ##### [410-20-25-10](https://asc.understandingaccounting.org/asc/410/20/#410-20-25-10) Pending content: no Source downloaded (UTC): 2026-09-10T00:20:53.384Z to 2026-09-10T00:20:53.384Z Record version: sha256:6ee9e13c226482863029a0000e26efea7aa4dae8127cdc83fe5e98136aa3caf7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Instances may occur in which sufficient information to estimate the fair value of an asset retirement obligation is unavailable. For example, if an asset has an indeterminate useful life, sufficient information to estimate a range of potential settlement dates for the obligation might not be available. In such cases, the liability would be initially recognized in the period in which sufficient information exists to estimate a range of potential settlement dates that is needed to employ a present value technique to estimate fair value. ##### [410-20-25-11](https://asc.understandingaccounting.org/asc/410/20/#410-20-25-11) Pending content: no Source downloaded (UTC): 2026-09-10T00:20:53.384Z to 2026-09-10T00:20:53.384Z Record version: sha256:c7b236ac7d5c718a4ad42360e4d4e4f349c256a8946f6ef0633e844bf37b7306 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Examples of information that is expected to provide a basis for estimating the potential settlement dates, potential methods of settlement, and the associated probabilities include, but are not limited to, information that is derived from the entity's past practice, industry practice, management's intent, or the asset's estimated economic life. The estimated economic life of the asset might indicate a potential settlement date for the asset retirement obligation. However, the original estimated economic life of the asset may not, in and of itself, establish that date because the entity may intend to make improvements to the asset that could extend the life of the asset or the entity could defer settlement of the obligation beyond the economic life of the asset. In those situations, the entity would look beyond the economic life of the asset in determining the settlement date or range of potential settlement dates to use when estimating the fair value of the asset retirement obligation. ##### [410-20-25-12](https://asc.understandingaccounting.org/asc/410/20/#410-20-25-12) Pending content: no Source downloaded (UTC): 2026-09-10T00:20:53.384Z to 2026-09-10T00:20:53.384Z Record version: sha256:b8e0998ef03b58e0a201399f923a3dda37378fe165fc3c6d2c3f4e1262b8eafe Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An asset retirement obligation may result from the acquisition, construction, or development and (or) normal operation of a long-lived asset that has an indeterminate useful life and thereby an indeterminate settlement date for the asset retirement obligation. ##### [410-20-25-13](https://asc.understandingaccounting.org/asc/410/20/#410-20-25-13) Pending content: no Source downloaded (UTC): 2026-09-10T00:20:53.384Z to 2026-09-10T00:20:53.384Z Record version: sha256:c387031cecb378a9895e0a73d2091b43b767719de8baeea173ccfc6ba2b062b8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If a current law, regulation, or contract requires an entity to perform an asset retirement activity when an asset is dismantled or demolished, there is an unambiguous requirement to perform the retirement activity even if that activity can be indefinitely deferred. At some time deferral will no longer be possible, because no tangible asset will last forever (except land). Therefore, the obligation to perform the asset retirement activity is unconditional even though uncertainty exists about the timing and (or) method of settlement. #### Uncertainty in Performance Obligations ##### [410-20-25-14](https://asc.understandingaccounting.org/asc/410/20/#410-20-25-14) Pending content: no Source downloaded (UTC): 2026-09-10T00:20:53.384Z to 2026-09-10T00:20:53.384Z Record version: sha256:1963b65acb121eb7dd9afd355528e51455031238cdaeaaafb5cd6b3016201f51 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic requires recognition of a conditional asset retirement obligation before the event that either requires or waives performance occurs. Uncertainty surrounding conditional performance of the retirement obligation is factored into its measurement by assessing the likelihood that performance will be required. In situations in which the conditional aspect has only 2 outcomes and there is no information about which outcome is more probable, a 50 percent likelihood for each outcome shall be used until additional information is available. ##### [410-20-25-15](https://asc.understandingaccounting.org/asc/410/20/#410-20-25-15) Pending content: no Source downloaded (UTC): 2026-09-10T00:20:53.384Z to 2026-09-10T00:20:53.384Z Record version: sha256:bc14ee948bb9dfcc6fc964f6dfc6b8e23a9d048d78f8273563fffa5aa8cd90c3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An unambiguous requirement that gives rise to an asset retirement obligation coupled with a low likelihood of required performance still requires recognition of a liability. Uncertainty about the conditional outcome of the obligation is incorporated into the measurement of the fair value of that liability, not the recognition decision. Uncertainty about performance of conditional obligations shall not prevent the determination of a reasonable estimate of fair value. A past history of nonenforcement of an unambiguous obligation does not defer recognition of a liability, but its measurement is affected by the uncertainty over the requirement to perform retirement activities. #### Acquired Asset Retirement Obligations ##### [410-20-25-16](https://asc.understandingaccounting.org/asc/410/20/#410-20-25-16) Pending content: no Source downloaded (UTC): 2026-09-10T00:20:53.384Z to 2026-09-10T00:20:53.384Z Record version: sha256:bd428efbc5b140fe9cb8f7dc70354011d99e3b90c9f0f130449f349fee64659d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If a tangible long-lived asset with an existing asset retirement obligation is acquired, a liability for that obligation shall be recognized at the asset's acquisition date as if that obligation were incurred on that date. Source downloaded (UTC): 2026-09-10T00:20:56.669Z to 2026-09-10T00:20:56.669Z Record version: sha256:ec6dfb6660ea0e88938c662d20a81721fdbe68cf45286b61da6133a49f807d84 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 410-20-30: 30 Initial Measurement [Read section](https://asc.understandingaccounting.org/asc/410/20/#30-initial-measurement) SEC content: no #### Determination of a Reasonable Estimate of Fair Value ##### [410-20-30-1](https://asc.understandingaccounting.org/asc/410/20/#410-20-30-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:20:56.669Z to 2026-09-10T00:20:56.669Z Record version: sha256:db324c3b0ae320d3886d217fec7c30b659e13d362a28a778f51899d667d1e9b7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An expected present value technique will usually be the only appropriate technique with which to estimate the fair value of a liability for an [asset retirement obligation](https://asc.understandingaccounting.org/glossary/a/#asset-retirement-obligation "An obligation associated with the retirement of a tangible long-lived asset."). An entity, when using that technique, shall discount the expected cash flows using a credit-adjusted risk-free rate. Thus, the effect of an entity's credit standing is reflected in the discount rate rather than in the expected cash flows. Proper application of a [discount rate adjustment technique](https://asc.understandingaccounting.org/glossary/d/#discount-rate-adjustment-technique "A present value technique that uses a risk-adjusted discount rate and contractual, promised, or most likely cash flows.") entails analysis of at least two liabilities—the liability that exists in the marketplace and has an observable interest rate and the liability being measured. The appropriate rate of interest for the cash flows being measured shall be inferred from the observable rate of interest of some other liability, and to draw that inference the characteristics of the cash flows shall be similar to those of the liability being measured. Rarely, if ever, would there be an observable rate of interest for a liability that has cash flows similar to an asset retirement obligation being measured. In addition, an asset retirement obligation usually will have uncertainties in both timing and amount. In that circumstance, employing a discount rate adjustment technique, where uncertainty is incorporated into the rate, will be difficult, if not impossible. See paragraphs [410-20-55-13 through 55-17](https://asc.understandingaccounting.org/asc/410/20/#410-20-55-13) and Example 2 (paragraph [410-20-55-35](https://asc.understandingaccounting.org/asc/410/20/#410-20-55-35)). For further information on present value techniques, see the guidance beginning in paragraph [820-10-55-4](https://asc.understandingaccounting.org/asc/820/10/#820-10-55-4). Source downloaded (UTC): 2026-09-10T00:20:59.316Z to 2026-09-10T00:20:59.316Z Record version: sha256:7e5ba5e8eb1b77eeada7309b1563641739c79df2158420c12b347bf4bbc03c00 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 410-20-35: 35 Subsequent Measurement [Read section](https://asc.understandingaccounting.org/asc/410/20/#35-subsequent-measurement) SEC content: no #### Allocation of Asset Retirement Cost ##### [410-20-35-1](https://asc.understandingaccounting.org/asc/410/20/#410-20-35-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:20:59.316Z to 2026-09-10T00:20:59.316Z Record version: sha256:70b8fc7c05553e2e7187cb0b0aef2bf0e019f3e915aae0f6c2e6c80febcc59b5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A liability for an [asset retirement obligation](https://asc.understandingaccounting.org/glossary/a/#asset-retirement-obligation "An obligation associated with the retirement of a tangible long-lived asset.") may be incurred over more than one reporting period if the events that create the obligation occur over more than one reporting period. Any incremental liability incurred in a subsequent reporting period shall be considered to be an additional layer of the original liability. Each layer shall be initially measured at fair value. For example, the liability for decommissioning a nuclear power plant is incurred as contamination occurs. Each period, as contamination increases, a separate layer shall be measured and recognized. Paragraph [410-20-30-1](https://asc.understandingaccounting.org/asc/410/20/#410-20-30-1) provides guidance on using that technique. ##### [410-20-35-2](https://asc.understandingaccounting.org/asc/410/20/#410-20-35-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:20:59.316Z to 2026-09-10T00:20:59.316Z Record version: sha256:1bf4a352f5ba7333ee0a71fd28a486a2de91836972928bfeda378b4c10415aae Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity shall subsequently allocate that [asset retirement cost](https://asc.understandingaccounting.org/glossary/a/#asset-retirement-cost "The amount capitalized that increases the carrying amount of the long-lived asset when a liability for an asset retirement obligation is recognized.") to expense using a systematic and rational method over its useful life. Application of a systematic and rational allocation method does not preclude an entity from capitalizing an amount of asset retirement cost and allocating an equal amount to expense in the same accounting period. For example, assume an entity acquires a long-lived asset with an estimated life of 10 years. As that asset is operated, the entity incurs one-tenth of the liability for an asset retirement obligation each year. Application of a systematic and rational allocation method would not preclude that entity from capitalizing and then expensing one-tenth of the asset retirement costs each year. ##### [410-20-35-3](https://asc.understandingaccounting.org/asc/410/20/#410-20-35-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:20:59.316Z to 2026-09-10T00:20:59.316Z Record version: sha256:a1608a19451bcbfc7627cc4ce969d6fe1f7c019d815ce3c0ba955ff76e70920b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In periods subsequent to initial measurement, an entity shall recognize period-to-period changes in the liability for an asset retirement obligation resulting from the following: 1. a The passage of time 2. b Revisions to either the timing or the amount of the original estimate of undiscounted cash flows. ##### [410-20-35-4](https://asc.understandingaccounting.org/asc/410/20/#410-20-35-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:20:59.316Z to 2026-09-10T00:20:59.316Z Record version: sha256:fda83f12913c37c10f2e6ba960b5e7983c0e5f89bf8155f37b13483e65f85a84 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity shall measure and incorporate changes due to the passage of time into the carrying amount of the liability before measuring changes resulting from a revision to either the timing or the amount of estimated cash flows. ##### [410-20-35-5](https://asc.understandingaccounting.org/asc/410/20/#410-20-35-5) Pending content: no Source downloaded (UTC): 2026-09-10T00:20:59.316Z to 2026-09-10T00:20:59.316Z Record version: sha256:b0081be01f4b00812c95c65f9fd015ec2df6b32405952e932a69384ef760fc1c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity shall measure changes in the liability for an asset retirement obligation due to passage of time by applying an interest method of allocation to the amount of the liability at the beginning of the period. The interest rate used to measure that change shall be the credit-adjusted risk-free rate that existed when the liability, or portion thereof, was initially measured. That amount shall be recognized as an increase in the carrying amount of the liability and as an expense classified as [accretion expense](https://asc.understandingaccounting.org/glossary/a/#accretion-expense "An amount recognized as an expense classified as an operating item in the statement of income resulting from the increase in the carrying amount of the liability associated with the asset retirement obligation."). Paragraph [835-20-15-7](https://asc.understandingaccounting.org/asc/835/20/#835-20-15-7) states that accretion expense related to exit costs and asset retirement obligations shall not be considered to be interest cost for purposes of applying Subtopic 835-20. ##### [410-20-35-6](https://asc.understandingaccounting.org/asc/410/20/#410-20-35-6) Pending content: no Source downloaded (UTC): 2026-09-10T00:20:59.316Z to 2026-09-10T00:20:59.316Z Record version: sha256:2ccd9c61e79ae5cbd6b0f53856292b8bb7e1be1b92c894ab00d896b8dd8a1de9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The subsequent measurement provisions require an entity to identify undiscounted estimated cash flows associated with the initial measurement of a liability. Therefore, an entity that obtains an initial measurement of fair value from a market price or from a technique other than an expected present value technique must determine the undiscounted cash flows and estimated timing of those cash flows that are embodied in that fair value amount for purposes of applying the subsequent measurement provisions. Example 1 (see paragraph [410-20-55-31](https://asc.understandingaccounting.org/asc/410/20/#410-20-55-31)) provides an illustration of the subsequent measurement of a liability that is initially obtained from a market price. (See paragraph [410-20-25-14](https://asc.understandingaccounting.org/asc/410/20/#410-20-25-14) for a discussion on conditional outcomes.) ##### [410-20-35-7](https://asc.understandingaccounting.org/asc/410/20/#410-20-35-7) Pending content: no Source downloaded (UTC): 2026-09-10T00:20:59.316Z to 2026-09-10T00:20:59.316Z Record version: sha256:6752011be3a47fa27880ecea715a111016a889b8340635a8cc7e5b72520f4328 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [410-20-25-14](https://asc.understandingaccounting.org/asc/410/20/#410-20-25-14) explains how uncertainty surrounding conditional performance of a retirement obligation is factored into its measurement by assessing the likelihood that performance will be required. As the time for notification approaches, more information and a better perspective about the ultimate outcome will likely be obtained. Consequently, reassessment of the timing, amount, and probabilities associated with the expected cash flows may change the amount of the liability recognized. See paragraphs [410-20-55-18 through 55-19](https://asc.understandingaccounting.org/asc/410/20/#410-20-55-18) . #### Change in Estimate ##### [410-20-35-8](https://asc.understandingaccounting.org/asc/410/20/#410-20-35-8) Pending content: no Source downloaded (UTC): 2026-09-10T00:20:59.316Z to 2026-09-10T00:20:59.316Z Record version: sha256:16a768788bdd40e75a260251046ef0029ef7ee6024b815bf7325d96817c50f78 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Changes resulting from revisions to the timing or the amount of the original estimate of undiscounted cash flows shall be recognized as an increase or a decrease in the carrying amount of the liability for an asset retirement obligation and the related asset retirement cost capitalized as part of the carrying amount of the related long-lived asset. Upward revisions in the amount of undiscounted estimated cash flows shall be discounted using the current credit-adjusted risk-free rate. Downward revisions in the amount of undiscounted estimated cash flows shall be discounted using the credit-adjusted risk-free rate that existed when the original liability was recognized. If an entity cannot identify the prior period to which the downward revision relates, it may use a weighted-average credit-adjusted risk-free rate to discount the downward revision to estimated future cash flows. When asset retirement costs change as a result of a revision to estimated cash flows, an entity shall adjust the amount of asset retirement cost allocated to expense in the period of change if the change affects that period only or in the period of change and future periods if the change affects more than one period as required by paragraphs [250-10-45-17 through 45-20](https://asc.understandingaccounting.org/asc/250/10/#250-10-45-17) for a change in estimate. #### Effects of Funding and Assurance Provisions ##### [410-20-35-9](https://asc.understandingaccounting.org/asc/410/20/#410-20-35-9) Pending content: no Source downloaded (UTC): 2026-09-10T00:20:59.316Z to 2026-09-10T00:20:59.316Z Record version: sha256:e27001571839ea27f8006fd72a2bf9302ead24f046537d9dcb4fa385abf35c7e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Methods of providing assurance include surety bonds, insurance policies, letters of credit, guarantees by other entities, and establishment of trust funds or identification of other assets dedicated to satisfy the asset retirement obligation. The existence of funding and assurance provisions may affect the determination of the credit-adjusted risk-free rate. For a previously recognized asset retirement obligation, changes in funding and assurance provisions have no effect on the initial measurement or accretion of that liability, but may affect the credit-adjusted risk-free rate used to discount upward revisions in undiscounted cash flows for that obligation. Source downloaded (UTC): 2026-09-10T00:21:03.424Z to 2026-09-10T00:21:03.424Z Record version: sha256:cc25d78bfa76acf2839f472911a6363889425c65899cfd4a9379de96347f13c5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 410-20-40: 40 Derecognition [Read section](https://asc.understandingaccounting.org/asc/410/20/#40-derecognition) SEC content: no #### Settlement of an Asset Retirement Obligation ##### [410-20-40-1](https://asc.understandingaccounting.org/asc/410/20/#410-20-40-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:03.424Z to 2026-09-10T00:21:03.424Z Record version: sha256:58a936eefa2911b7f786e0c659df28280b177aacbb76234e02bac0d5ebafda9f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Typically, settlement of an [asset retirement obligation](https://asc.understandingaccounting.org/glossary/a/#asset-retirement-obligation "An obligation associated with the retirement of a tangible long-lived asset.") is not required until the associated asset is retired. However, certain circumstances may exist in which partial settlement of an asset retirement obligation is required or performed before the asset is fully retired. The nature of asset retirement obligations in various industries is such that the obligations are not necessarily satisfied when the current operation or use of the asset ceases. These obligations can be settled during operation of the asset or after the operations cease. The timing of the ultimate settlement of a liability is unrelated to and should not affect its initial recognition in the financial statements provided the obligation is associated with the [retirement](https://asc.understandingaccounting.org/glossary/r/#retirement "The other-than-temporary removal of a long-lived asset from service. That term encompasses sale, abandonment, recycling, or disposal in some other manner. However, it does not encompass the temporary idling of a long-lived asset. After an entity retires an asset, that asset is no longer under the control of that entity, no longer in existence, or no longer capable of being used in the manner for which the asset was originally acquired, constructed, or developed.") of a tangible long-lived asset. ##### [410-20-40-2](https://asc.understandingaccounting.org/asc/410/20/#410-20-40-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:03.424Z to 2026-09-10T00:21:03.424Z Record version: sha256:80f9557103207bc798d77cdfa3d0d688696d2eb87602973fa6440853d925a154 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [410-20-25-14](https://asc.understandingaccounting.org/asc/410/20/#410-20-25-14) explains how uncertainty surrounding conditional performance of a retirement obligation is factored into its measurement by assessing the likelihood that performance will be required. If, as time progresses, it becomes apparent that retirement activities will not be required, the liability and the remaining unamortized [asset retirement cost](https://asc.understandingaccounting.org/glossary/a/#asset-retirement-cost "The amount capitalized that increases the carrying amount of the long-lived asset when a liability for an asset retirement obligation is recognized.") shall be reduced to zero. ##### [410-20-40-3](https://asc.understandingaccounting.org/asc/410/20/#410-20-40-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:03.424Z to 2026-09-10T00:21:03.424Z Record version: sha256:a0edee0037c8f366857b4fc705cc42d7944ca3469bdcfc04794cb9280001349f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Providing assurance that an entity will be able to satisfy its asset retirement obligation does not satisfy or extinguish the related liability. The effect of surety bonds, letters of credit, and guarantees is to provide assurance that third parties will provide amounts to satisfy the asset retirement obligations if the entity that has primary responsibility (the obligor) to do so cannot or does not fulfill its obligations. The possibility that a third party will satisfy the asset retirement obligations does not relieve the obligor from its primary responsibility for those obligations. If a third party is required to satisfy asset retirement obligations due to the failure or inability of the obligor to do so directly, the obligor would then have a liability to the third party. Source downloaded (UTC): 2026-09-10T00:21:05.373Z to 2026-09-10T00:21:05.373Z Record version: sha256:c85f95bf4718ff54603f16960157620598fe9ff0881bf9784bcfe39bca31a1ec Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 410-20-45: 45 Other Presentation Matters [Read section](https://asc.understandingaccounting.org/asc/410/20/#45-other-presentation-matters) SEC content: no #### Classification of Accretion Expense ##### [410-20-45-1](https://asc.understandingaccounting.org/asc/410/20/#410-20-45-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:05.373Z to 2026-09-10T00:21:05.373Z Record version: sha256:19fe2b456a04041ff23e6bd54943ba4281278fea7c28c84de40cd20e6385e9ca Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Accretion expense](https://asc.understandingaccounting.org/glossary/a/#accretion-expense "An amount recognized as an expense classified as an operating item in the statement of income resulting from the increase in the carrying amount of the liability associated with the asset retirement obligation.") shall be classified as an operating item in the statement of income. An entity may use any descriptor for accretion expense so long as it conveys the underlying nature of the expense. ##### [410-20-45-2](https://asc.understandingaccounting.org/asc/410/20/#410-20-45-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:05.373Z to 2026-09-10T00:21:05.373Z Record version: sha256:582a4c24c7c0bd22fb3a6c3e094c6371c43bdca428212fa5707ad203b892b12a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [230-10-45-17](https://asc.understandingaccounting.org/asc/230/10/#230-10-45-17) for additional information about the classification of cash payments for [asset retirement obligations](https://asc.understandingaccounting.org/glossary/a/#asset-retirement-obligation "An obligation associated with the retirement of a tangible long-lived asset.") as operating items on the statement of cash flows. #### Statement of Cash Flows ##### [410-20-45-3](https://asc.understandingaccounting.org/asc/410/20/#410-20-45-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:05.373Z to 2026-09-10T00:21:05.373Z Record version: sha256:4ea8c75356a733f64399736aa5ba060a2a40166c1d6f045d77c9da4c90b3ce27 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [230-10-45-17(e)](https://asc.understandingaccounting.org/asc/230/10/#230-10-45-17) states that a cash payment made to settle an asset retirement obligation is a cash outflow for operating activities. Source downloaded (UTC): 2026-09-10T00:21:07.224Z to 2026-09-10T00:21:07.224Z Record version: sha256:e3e50198f64930a88e01307eab22ea7bf97d9f62ab964c23d85c0e2db2ed64da Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 410-20-50: 50 Disclosure [Read section](https://asc.understandingaccounting.org/asc/410/20/#50-disclosure) SEC content: no ##### [410-20-50-1](https://asc.understandingaccounting.org/asc/410/20/#410-20-50-1) Pending content: yes Source downloaded (UTC): 2026-09-10T00:21:07.224Z to 2026-09-10T00:21:07.224Z Record version: sha256:71cca8fc921e63e50733f1e6a22c56cc04d21c348589e6d5a7c2e294741c435c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity shall disclose all of the following information about its [asset retirement obligations](https://asc.understandingaccounting.org/glossary/a/#asset-retirement-obligation "An obligation associated with the retirement of a tangible long-lived asset."): 1. a A general description of the asset retirement obligations and the associated long-lived assets 2. b The fair value of assets that are legally restricted for purposes of settling asset retirement obligations 3. c A reconciliation of the beginning and ending aggregate carrying amount of asset retirement obligations showing separately the changes attributable to the following components, whenever there is a significant change in any of these components during the reporting period: 1. 1 Liabilities incurred in the current period 2. 2 Liabilities settled in the current period 3. 3 [Accretion expense](https://asc.understandingaccounting.org/glossary/a/#accretion-expense "An amount recognized as an expense classified as an operating item in the statement of income resulting from the increase in the carrying amount of the liability associated with the asset retirement obligation.") 4. 4 Revisions in estimated cash flows. Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance: [220-40-65-1](https://asc.understandingaccounting.org/asc/220/40/#220-40-65-1)An entity shall disclose all of the following information about its [asset retirement obligations](https://asc.understandingaccounting.org/glossary/a/#asset-retirement-obligation "An obligation associated with the retirement of a tangible long-lived asset."): 1. a A general description of the asset retirement obligations and the associated long-lived assets 2. b The fair value of assets that are legally restricted for purposes of settling asset retirement obligations 3. c A reconciliation of the beginning and ending aggregate carrying amount of asset retirement obligations showing separately the changes attributable to the following components, whenever there is a significant change in any of these components during the reporting period: 1. 1 Liabilities incurred in the current period 2. 2 Liabilities settled in the current period 3. 3 [Accretion expense](https://asc.understandingaccounting.org/glossary/a/#accretion-expense "An amount recognized as an expense classified as an operating item in the statement of income resulting from the increase in the carrying amount of the liability associated with the asset retirement obligation.") 4. 4 Revisions in estimated cash flows. See paragraphs [220-40-50-21 through 50-25](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-21) for additional disclosure requirements. ##### [410-20-50-2](https://asc.understandingaccounting.org/asc/410/20/#410-20-50-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:07.224Z to 2026-09-10T00:21:07.224Z Record version: sha256:59ea41bfcb6fd4ce14b27dda38dabea13931b21c37fd0c5ad23e74dcfea9741f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If the fair value of an asset retirement obligation cannot be reasonably estimated, that fact and the reasons therefor shall be disclosed. Source downloaded (UTC): 2026-09-10T00:21:10.890Z to 2026-09-10T00:21:10.890Z Record version: sha256:f3ef0ea8516ba96d1a8f537099df6b3fc0432afaefc6acd6f8f9a2fcbc7e9842 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 410-20-55: 55 Implementation Guidance and Illustrations [Read section](https://asc.understandingaccounting.org/asc/410/20/#55-implementation-guidance-and-illustrations) SEC content: no #### Implementation Guidance ##### [410-20-55-1](https://asc.understandingaccounting.org/asc/410/20/#410-20-55-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:10.890Z to 2026-09-10T00:21:10.890Z Record version: sha256:8edf6493b5df06b2c216e404079ee81291d1e20719719787eb66cc9b62471f2a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This implementation guidance illustrates Section 410-20-15. In most cases involving an [asset retirement obligation](https://asc.understandingaccounting.org/glossary/a/#asset-retirement-obligation "An obligation associated with the retirement of a tangible long-lived asset."), the determination of whether a [legal obligation](https://asc.understandingaccounting.org/glossary/l/#legal-obligation "An obligation that a party is required to settle as a result of an existing or enacted law, statute, ordinance, or written or oral contract or by legal construction of a contract under the doctrine of promissory estoppel.") exists should be unambiguous. However, in situations in which no law, statute, ordinance, or contract exists but an entity makes a promise to a third party (which may include the public at large) about its intention to perform [retirement](https://asc.understandingaccounting.org/glossary/r/#retirement "The other-than-temporary removal of a long-lived asset from service. That term encompasses sale, abandonment, recycling, or disposal in some other manner. However, it does not encompass the temporary idling of a long-lived asset. After an entity retires an asset, that asset is no longer under the control of that entity, no longer in existence, or no longer capable of being used in the manner for which the asset was originally acquired, constructed, or developed.") activities, facts and circumstances need to be considered carefully in determining whether that promise has imposed a legal obligation upon the promisor under the doctrine of [promissory estoppel](https://asc.understandingaccounting.org/glossary/p/#promissory-estoppel "\"The principle that a promise made without consideration may nonetheless be enforced to prevent injustice if the promisor should have reasonably expected the promisee to rely on the promise and if the promisee did actually rely on the promise to his or her detriment.\" (See Black's Law Dictionary, seventh edition.)"). A legal obligation may exist even though no party has taken any formal action. In assessing whether a legal obligation exists, an entity is not permitted to forecast changes in the law or changes in the interpretation of existing laws and regulations. Preparers and their legal advisors are required to evaluate current circumstances to determine whether a legal obligation exists. ##### [410-20-55-2](https://asc.understandingaccounting.org/asc/410/20/#410-20-55-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:10.890Z to 2026-09-10T00:21:10.890Z Record version: sha256:021bc5ded64fe8a8b06068f65c185bbde6781622ac2599b82c3d64c7a3931be2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For example, assume an entity operates a manufacturing facility and has plans to retire it within five years. Members of the local press have begun to publicize the fact that when the entity ceases operations at the plant, it plans to abandon the site without demolishing the building and restoring the underlying land. Due to the significant negative publicity and demands by the public that the entity commit to dismantling the plant upon retirement, the entity's chief executive officer holds a press conference at city hall to announce that the entity will demolish the building and restore the underlying land when the entity ceases operations at the plant. Although no law, statute, ordinance, or written contract exists requiring the entity to perform any demolition or restoration activities, the promise made by the entity's chief executive officer may have created a legal obligation under the doctrine of promissory estoppel. In that circumstance, the entity's management (and legal counsel, if necessary) would have to evaluate the particular facts and circumstances to determine whether a legal obligation exists. ##### [410-20-55-3](https://asc.understandingaccounting.org/asc/410/20/#410-20-55-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:10.890Z to 2026-09-10T00:21:10.890Z Record version: sha256:bf08c4f4b3dc25278b508cec86b58e1d5c55d35df79dfedc39e4013b1204980d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Once an entity determines that a duty or responsibility exists, it will then need to assess whether an obligating event has occurred that leaves it little or no discretion to avoid the future transfer or use of assets. If such an obligating event has occurred, an asset retirement obligation meets the definition of a liability and qualifies for recognition in the financial statements. However, if an obligating event that leaves an entity little or no discretion to avoid the future transfer or use of assets has not occurred, an asset retirement obligation does not meet the definition of a liability and, therefore, should not be recognized in the financial statements. ##### [410-20-55-4](https://asc.understandingaccounting.org/asc/410/20/#410-20-55-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:10.890Z to 2026-09-10T00:21:10.890Z Record version: sha256:6fa0b907e281a2a6b62608fbacc6e4c7a71ae66159deb3cdaa6638c9b2e6d5db Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Identifying the obligating event is often difficult, especially in situations that involve the occurrence of a series of transactions or other events or circumstances affecting the entity. For example, in the case of an asset retirement obligation, a law or an entity's promise may create a duty or responsibility, but that law or promise in and of itself may not be the obligating event that results in an entity's having little or no discretion to avoid a future transfer or use of assets. An entity must look to the nature of the duty or responsibility to assess whether the obligating event has occurred. For example, in the case of a nuclear power facility, an entity assumes responsibility for decontamination of that facility upon receipt of the license to operate it. However, no obligation to decontaminate exists until the facility is operated and contamination occurs. Therefore, the contamination, not the receipt of the license, constitutes the obligating event. ##### [410-20-55-5](https://asc.understandingaccounting.org/asc/410/20/#410-20-55-5) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:10.890Z to 2026-09-10T00:21:10.890Z Record version: sha256:d5ba3a735746f9fe6c09c2f8a3ae99f6ea51e803634aa41abefa8196220f9f3a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This implementation guidance illustrates Section 410-20-15. Contracts between entities may contain an option or a provision that requires one party to the contract to perform retirement activities when an asset is retired. The other party may decide in the future not to exercise the option or to waive the provision to perform retirement activities, or that party may have a history of waiving similar provisions in other contracts. Even if there is an expectation of a waiver or nonenforcement, the contract still imposes a legal obligation. That obligation is included in the scope of this Subtopic. The likelihood of a waiver or nonenforcement will affect the measurement of the liability. For example, consider an entity that owns and operates a landfill. Regulations require that that entity perform capping, [closure](https://asc.understandingaccounting.org/glossary/c/#closure "Related to the Resource Conservation and Recovery Act of 1976: the process in which the owner-operator of a hazardous waste management unit discontinues active operation of the unit by treating, removing from the site, or disposing of on site all hazardous wastes in accordance with an Environmental Protection Agency or state-approved plan. Included, for example, are the process of emptying, cleaning, and removing or filling underground storage tanks and the capping of a landfill. Closure entails specific financial guarantees and technical tasks that are included in a closure plan and must be implemented."), and postclosure activities. Capping activities involve covering the land with topsoil and planting vegetation. Closure activities include drainage, engineering, and demolition and must be performed prior to commencing the postclosure activities. Postclosure activities, the final retirement activities, include maintaining the landfill once final certification of closure has been received and monitoring the ground and surface water, gas emissions, and air quality. Closure and postclosure activities are performed after the entire landfill ceases receiving waste (that is, after the landfill is retired). However, capping activities are performed as sections of the landfill become full and are effectively retired. The fact that some of the capping activities are performed while the landfill continues to accept waste does not remove the obligation to perform those intermediate capping activities from the scope of this Subtopic. ##### [410-20-55-6](https://asc.understandingaccounting.org/asc/410/20/#410-20-55-6) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:10.890Z to 2026-09-10T00:21:10.890Z Record version: sha256:206bb1d3c38dc59f70f2f9947e8bdefe194ffe2351a6ba283930f3e7a45495c0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This implementation guidance illustrates Section 410-20-15. Whether an obligation results from the acquisition, construction, or development of a long-lived asset should, in most circumstances, be clear. For example, if an entity acquires a landfill that is already in operation, an obligation to perform capping, closure, and postclosure activities results from the acquisition and assumption of obligations related to past normal operations of the landfill. Additional obligations will be incurred as a result of future operations of the landfill. ##### [410-20-55-7](https://asc.understandingaccounting.org/asc/410/20/#410-20-55-7) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:10.890Z to 2026-09-10T00:21:10.890Z Record version: sha256:80756c48b6d672d416bdee1df77306a872f995b714d0b30f21f717df71e4b3e0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This implementation guidance illustrates Section 410-20-15. Whether an obligation results from the normal operation of a long-lived asset may require judgment. Obligations that result from the normal operation of an asset should be predictable and likely of occurring. For example, consider an entity that owns and operates a nuclear power plant. That entity has a legal obligation to perform decontamination activities when the plant ceases operations. Contamination, which gives rise to the obligation, is predictable and likely of occurring and is unavoidable as a result of operating the plant. Therefore, the obligation to perform decontamination activities at that plant results from the normal operation of the plant. ##### [410-20-55-8](https://asc.understandingaccounting.org/asc/410/20/#410-20-55-8) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:10.890Z to 2026-09-10T00:21:10.890Z Record version: sha256:a2a8e4b657b2fec2b69494f5db31a287e286c6b1477c028ce78b89c272d27cb9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For example, a certain amount of spillage may be inherent in the normal operations of a fuel storage facility, but a catastrophic accident caused by noncompliance with an entity's safety procedures is not. The obligation to clean up after the catastrophic accident does not result from the normal operation of the facility and is not within the scope of this Subtopic. ##### [410-20-55-9](https://asc.understandingaccounting.org/asc/410/20/#410-20-55-9) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:10.890Z to 2026-09-10T00:21:10.890Z Record version: sha256:bd8c8d4f189e22e1aa040a65ade98810edc94db57108635ae599030827afd9e3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An asset retirement obligation may exist for component parts of a larger system. In some circumstances, the retirement of the component parts may be required before the retirement of the larger system to which the component parts belong. ##### [410-20-55-10](https://asc.understandingaccounting.org/asc/410/20/#410-20-55-10) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:10.890Z to 2026-09-10T00:21:10.890Z Record version: sha256:f3486d15f811edb53b0ab9394163ba0b9fa8a4fe023ae17b0b604aa738f00af8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For example, consider an aluminum smelter that owns and operates several kilns lined with a special type of brick. The kilns have a long useful life, but the bricks wear out after approximately five years of use and are replaced on a periodic basis to maintain optimal efficiency of the kilns. Because the bricks become contaminated with hazardous chemicals while in the kiln, a state law requires that when the bricks are removed, they must be disposed of at a special [hazardous waste](https://asc.understandingaccounting.org/glossary/h/#hazardous-waste "Related to Resource Conservation and Recovery Act of 1976: a waste, or combination of wastes, that because of its quantity, concentration, toxicity, corrosiveness, mutagenicity or inflammability, or physical, chemical, or infectious characteristics may cause, or significantly contribute to, an increase in mortality or an increase in serious irreversible, or incapacitating reversible illness or pose a substantial present or potential hazard to human health or the environment when improperly treated, stored, transported, or disposed of, or otherwise managed. Technically, those wastes that are regulated under the Resource Conservation and Recovery Act of 1976 40 CFR Part 261 are considered to be hazardous wastes.") site. The obligation to dispose of those bricks is within the scope of this Subtopic. The cost of the replacement bricks and their installation are not part of that obligation. This implementation guidance illustrates Section 410-20-15. ##### [410-20-55-11](https://asc.understandingaccounting.org/asc/410/20/#410-20-55-11) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:10.890Z to 2026-09-10T00:21:10.890Z Record version: sha256:1e08a4b3b744112f5237b55def106b6aef2629edd2d54989f88eca5c432d6ee6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If assets with asset retirement obligations are components of a larger group of assets (for example, a number of oil wells that make up an entire oil field operation), aggregation techniques may be necessary to derive a collective asset retirement obligation. This Subtopic does not preclude the use of estimates and computational shortcuts that are consistent with the fair value measurement objective when computing an aggregate asset retirement obligation for assets that are components of a larger group of assets. This implementation guidance illustrates paragraph [410-20-30-1](https://asc.understandingaccounting.org/asc/410/20/#410-20-30-1). ##### [410-20-55-12](https://asc.understandingaccounting.org/asc/410/20/#410-20-55-12) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:10.890Z to 2026-09-10T00:21:10.890Z Record version: sha256:d80d012c30cf7c36164d0138c6cdff6f01405f641f9accc8fbcd7c1e3978c14a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This implementation guidance illustrates Section 410-20-15. If, for example, a governmental unit retains the right (an option) to decide whether to require a retirement activity, there is some uncertainty about whether those retirement activities will be required or waived. Regardless of the uncertainty attributable to the option, a legal obligation to stand ready to perform retirement activities still exists, and the governmental unit might require them to be performed. Although the timing and method of settlement of the retirement obligation may depend on future events that may or may not be within the control of the entity, a legal obligation to stand ready to perform retirement activities still exists. The entity should consider the uncertainty about the timing and method of settlement in the measurement of the liability, consistent with a fair value measurement objective, regardless of whether the event that will trigger the settlement is partially or wholly under the control of the entity. ##### [410-20-55-13](https://asc.understandingaccounting.org/asc/410/20/#410-20-55-13) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:10.890Z to 2026-09-10T00:21:10.890Z Record version: sha256:0dadc46ecefe20fcc7756de0210e6ee73340b7c735ef04be40172aa1cd155c11 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This implementation guidance illustrates paragraph [410-20-30-1](https://asc.understandingaccounting.org/asc/410/20/#410-20-30-1). In estimating the fair value of a liability for an asset retirement obligation using an expected present value technique, an entity shall begin by estimating the expected cash flows that reflect, to the extent possible, a marketplace assessment of the cost and timing of performing the required retirement activities. Considerations in estimating those expected cash flows include developing and incorporating explicit assumptions, to the extent possible, about all of the following: 1. a The costs that a third party would incur in performing the tasks necessary to retire the asset 2. b Other amounts that a third party would include in determining the price of the transfer, including, for example, inflation, overhead, equipment charges, profit margin, and advances in technology 3. c The extent to which the amount of a third party's costs or the timing of its costs would vary under different future scenarios and the relative probabilities of those scenarios 4. d The price that a third party would demand and could expect to receive for bearing the uncertainties and unforeseeable circumstances inherent in the obligation, sometimes referred to as a market-risk premium. ##### [410-20-55-14](https://asc.understandingaccounting.org/asc/410/20/#410-20-55-14) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:10.890Z to 2026-09-10T00:21:10.890Z Record version: sha256:428494bf1e6d5c9742fb59ab3739f8656c640ef60f40fedd84a9d5c5c63376b2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. It is expected that uncertainties about the amount and timing of future cash flows can be accommodated by using the expected present value technique and therefore will not prevent the determination of a reasonable estimate of fair value. ##### [410-20-55-15](https://asc.understandingaccounting.org/asc/410/20/#410-20-55-15) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:10.890Z to 2026-09-10T00:21:10.890Z Record version: sha256:9dcf7732ec2d5798077ead69870adeac11083d2ab150b466834f75fd45f97371 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This implementation guidance illustrates paragraph [410-20-30-1](https://asc.understandingaccounting.org/asc/410/20/#410-20-30-1). An entity shall discount expected cash flows using an interest rate that equates to a risk-free interest rate adjusted for the effect of its credit standing (a credit-adjusted risk-free rate). In determining the adjustment for the effect of its credit standing, an entity should consider the effects of all terms, collateral, and existing guarantees on the fair value of the liability. ##### [410-20-55-16](https://asc.understandingaccounting.org/asc/410/20/#410-20-55-16) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:10.890Z to 2026-09-10T00:21:10.890Z Record version: sha256:847f27e5a8d1ea60fa372602762cbb84ac9aa07ab3e48500290ee972b3624d8f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Adjustments for default risk can be reflected in either the discount rate or the expected cash flows. In most situations, an entity will know the adjustment required to the risk-free interest rate to reflect its credit standing. Consequently, it would be easier and less complex to reflect that adjustment in the discount rate. ##### [410-20-55-17](https://asc.understandingaccounting.org/asc/410/20/#410-20-55-17) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:10.890Z to 2026-09-10T00:21:10.890Z Record version: sha256:66d2a8040c7c4339d4d4ea9d9814cd2d931b6d169271ca90014ff008336e670e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In addition, because of the requirements in paragraph [410-20-35-8](https://asc.understandingaccounting.org/asc/410/20/#410-20-35-8) relating to upward and downward adjustments in expected cash flows, it is essential to the operationality of this Subtopic that the credit standing of the entity be reflected in the discount rate. For those reasons, the risk-free rate shall be adjusted for the credit standing of the entity to determine the discount rate. ##### [410-20-55-18](https://asc.understandingaccounting.org/asc/410/20/#410-20-55-18) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:10.890Z to 2026-09-10T00:21:10.890Z Record version: sha256:460fb187d8e7be2f0ff98c8a8ab4f2d8dec2cf2f82a69011efd34d426e3d64a5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This implementation guidance illustrates paragraphs [410-20-35-1 through 35-6](https://asc.understandingaccounting.org/asc/410/20/#410-20-35-1) . In periods subsequent to initial measurement, an entity recognizes the effect of the passage of time on the amount of a liability for an asset retirement obligation. A period-to-period increase in the carrying amount of the liability shall be recognized as an operating item ([accretion expense](https://asc.understandingaccounting.org/glossary/a/#accretion-expense "An amount recognized as an expense classified as an operating item in the statement of income resulting from the increase in the carrying amount of the liability associated with the asset retirement obligation.")) in the statement of income. An equivalent amount is added to the carrying amount of the liability. To calculate accretion expense, an entity shall multiply the beginning of the period liability balance by the credit-adjusted risk-free rate that existed when the liability was initially measured. The liability shall be adjusted for accretion prior to adjusting for revisions in estimated cash flows. ##### [410-20-55-19](https://asc.understandingaccounting.org/asc/410/20/#410-20-55-19) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:10.890Z to 2026-09-10T00:21:10.890Z Record version: sha256:48b2958d9c26d4ec3a84dd73259b1421c4f4ebbd51789e82628ff72dfb37da7b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This implementation guidance illustrates paragraph [410-20-35-8](https://asc.understandingaccounting.org/asc/410/20/#410-20-35-8). Revisions to a previously recorded asset retirement obligation will result from changes in the assumptions used to estimate the expected cash flows required to settle the asset retirement obligation, including changes in estimated probabilities, amounts, and timing of the settlement of the asset retirement obligation, as well as changes in the legal requirements of an obligation. Any changes that result in upward revisions to the expected cash flows shall be treated as a new liability and discounted at the current rate. Any downward revisions to the expected cash flows will result in a reduction of the asset retirement obligation. For downward revisions, the amount of the liability to be removed from the existing accrual shall be discounted at the credit-adjusted risk-free rate that was used at the time the obligation to which the downward revision relates was originally recorded (or the historical weighted-average rate if the year\[s\] to which the downward revision applies cannot be determined). ##### [410-20-55-20](https://asc.understandingaccounting.org/asc/410/20/#410-20-55-20) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:10.890Z to 2026-09-10T00:21:10.890Z Record version: sha256:70ebc47921bcf6c76dda81ec58e14e73289878131c3f9b576f2cc0f583f68a35 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Revisions to the asset retirement obligation result in adjustments of capitalized asset retirement costs and will affect subsequent depreciation of the related asset. Such adjustments are depreciated on a prospective basis. ##### [410-20-55-21](https://asc.understandingaccounting.org/asc/410/20/#410-20-55-21) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:10.890Z to 2026-09-10T00:21:10.890Z Record version: sha256:9b0ca8d87091456a5fe4c5e2ae887d3385e61234dcfa7303edfcbf31c14111fb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This implementation guidance illustrates Section 410-20-15. There is no conceptual difference between interim property retirements and replacements and those retirements that occur in circumstances in which the retired asset is not replaced. Therefore, any asset retirement obligation associated with the retirement of or the retirement and replacement of a component part of a larger system qualifies for recognition provided that the obligation meets the definition of a liability. The cost of replacement components is excluded. ##### [410-20-55-22](https://asc.understandingaccounting.org/asc/410/20/#410-20-55-22) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:10.890Z to 2026-09-10T00:21:10.890Z Record version: sha256:8f775572c492aebae3ef8ad6b7ee197611bc5574b2e83c0bccc37c3008903600 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Examples of interim property retirements and replacements for component parts of larger systems are components of transmission and distribution systems (utility poles), railroad ties, a single oil well that is part of a larger oil field, and aircraft engines. The assets in those examples may or may not have associated retirement obligations. ##### [410-20-55-23](https://asc.understandingaccounting.org/asc/410/20/#410-20-55-23) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:10.890Z to 2026-09-10T00:21:10.890Z Record version: sha256:855d86420d2e90609c931f6f7a73de13edcd78b91d6afaf1ae82074efb5482a7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. EU Directive 2002/96/EC was adopted on February 13, 2003, and directs EU-member countries to adopt legislation to regulate the collection, treatment, recovery, and environmentally sound [disposal](https://asc.understandingaccounting.org/glossary/d/#disposal "Related to the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 and the Resource Conservation and Recovery Act of 1976: under the Resource Conservation and Recovery Act of 1976, the discharge, deposit, injection, dumping, spilling, leaking, or placing of any solid waste or hazardous waste into or on any land or water so that such solid waste or hazardous waste or any constituent thereof may enter the environment or be emitted into the air or discharged into any waters, including groundwaters. Similarly under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 with regard to hazardous substances.") of electrical and electronic waste equipment. The actual legislation adopted by individual EU-member countries can have different requirements. An entity should apply the guidance herein, adjusted as needed for the specific requirements of the applicable EU-member country. ##### [410-20-55-24](https://asc.understandingaccounting.org/asc/410/20/#410-20-55-24) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:10.890Z to 2026-09-10T00:21:10.890Z Record version: sha256:a42958d6dc226db4d2bc0024148de355239a86e25795a69d5d0213cd217e1f60 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Directive distinguishes between new and historical waste. All products put on the market on or before August 13, 2005, are deemed to be historical waste equipment for the purposes of the Directive. Example 4 (see paragraph [410-20-55-63](https://asc.understandingaccounting.org/asc/410/20/#410-20-55-63)) does not address the accounting for new waste because there should be little diversity in practice in the accounting for such waste. Costs relating to waste of new equipment are to be borne solely by the producers of the new equipment. This implementation guidance illustrates Section 410-20-15. ##### [410-20-55-25](https://asc.understandingaccounting.org/asc/410/20/#410-20-55-25) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:10.890Z to 2026-09-10T00:21:10.890Z Record version: sha256:d0639eec6a31010bbb2f85ff65c452360ce36b5aacc3e4a7d668de7bf9ebbcb6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Under the Directive, the waste management obligation remains with the commercial user until the historical waste equipment is replaced, at which time the waste management obligation for that equipment may be transferred to the producer of the replacement equipment depending on the law adopted by the applicable EU-member country. If the commercial user does not replace the equipment, the obligation remains with that user until it disposes of the equipment. The Directive provides each EU-member country with the option to obligate commercial users to pay part or all of the costs associated with the historical waste even if the equipment is replaced. In this situation, the obligation would remain (partly or wholly) with the commercial user until the user disposes of the equipment. ##### [410-20-55-26](https://asc.understandingaccounting.org/asc/410/20/#410-20-55-26) Pending content: yes Source downloaded (UTC): 2026-09-10T00:21:10.890Z to 2026-09-10T00:21:10.890Z Record version: sha256:a669952ac673c91d67c0c01c0e2448e3255fab04139e9c6ef3a08cc232bf10d6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The accounting for the initial recognition and measurement of the liability and [asset retirement cost](https://asc.understandingaccounting.org/glossary/a/#asset-retirement-cost "The amount capitalized that increases the carrying amount of the long-lived asset when a liability for an asset retirement obligation is recognized.") should be consistent with paragraphs [410-20-25-1 through 25-4](https://asc.understandingaccounting.org/asc/410/20/#410-20-25-1) . The ability or intent of the commercial user to replace the asset and transfer the obligation does not relieve the user of its present duty or responsibility to settle the obligation. The replacement of the asset may, depending on EU-member country law, transfer the obligation to the replacement producer, and, if so, that transfer would affect the purchase price of the replacement asset. Upon initial recognition of a liability, an entity shall capitalize an asset retirement cost by increasing the carrying amount of the related asset by the same amount as the liability. The accounting subsequent to the initial recognition of the asset and liability should be consistent with the guidance in paragraphs [410-20-35-3 through 35-8](https://asc.understandingaccounting.org/asc/410/20/#410-20-35-3) . Transition date:(P) December 16, 2024; (N) December 16, 2025Transition guidance: [105-10-65-9](https://asc.understandingaccounting.org/asc/105/10/#105-10-65-9)The accounting for the initial recognition and measurement of the liability and [asset retirement cost](https://asc.understandingaccounting.org/glossary/a/#asset-retirement-cost "The amount capitalized that increases the carrying amount of the long-lived asset when a liability for an asset retirement obligation is recognized.") should be consistent with Sections 410-20-25 and 410-20-30. The ability or intent of the commercial user to replace the asset and transfer the obligation does not relieve the user of its present duty or responsibility to settle the obligation. The replacement of the asset may, depending on EU-member country law, transfer the obligation to the replacement producer, and, if so, that transfer would affect the purchase price of the replacement asset. Upon initial recognition of a liability, an entity shall capitalize an asset retirement cost by increasing the carrying amount of the related asset by the same amount as the liability. The accounting subsequent to the initial recognition of the asset and liability should be consistent with the guidance in paragraphs [410-20-35-3 through 35-8](https://asc.understandingaccounting.org/asc/410/20/#410-20-35-3) . ##### [410-20-55-27](https://asc.understandingaccounting.org/asc/410/20/#410-20-55-27) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:10.890Z to 2026-09-10T00:21:10.890Z Record version: sha256:ae1648b709e6d62245316f93a3a6430282e8ceb0d6d794342166321c34bb54c7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If the asset is subsequently replaced, with the obligation being transferred to the producer of the replacement equipment, the commercial user should determine the portion of the total amount paid to the producer that relates to the replacement equipment (the new asset) and the portion that relates to the transfer of the asset retirement obligation. That determination should be based on the [fair value](https://asc.understandingaccounting.org/glossary/f/#fair-value "The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.") of the asset retirement obligation, without the sale of the new asset. The price paid by the commercial user would not include any costs associated with the transfer of the obligation in situations in which the law in the EU-member country obligates commercial users to pay all of the costs associated with the historical waste even if the equipment is replaced. In those situations, the commercial user would not derecognize the liability from its balance sheet upon replacement, but rather when the obligation is ultimately settled. ##### [410-20-55-28](https://asc.understandingaccounting.org/asc/410/20/#410-20-55-28) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:10.890Z to 2026-09-10T00:21:10.890Z Record version: sha256:19b14d5e027ac4fd22290bd7e7bf9988402c61940825345ed428588251d3774e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The new asset should be measured as the residual amount (the excess of the price paid over the fair value of the asset retirement obligation transferred). That amount should be used in determining the new asset's cost basis. The commercial user should derecognize the liability from its balance sheet and recognize a gain or loss based on the difference between the carrying amount of the liability at the date of the sale and the portion of the sales price that relates to the obligation. The producer of the new asset should recognize revenue for the total amount received reduced by the fair value of the obligation upon the transfer of the obligation from the commercial user (that is, on a net basis). The requirements for the producer to measure the revenue from the sale of the new asset as the residual amount and recognize revenue only for the sale of the new asset are applicable for those producers for which the recycling of electronic waste equipment is not a revenue-generating business activity. In situations in which the recycling of equipment is a revenue-generating business activity for the producer, that producer should apply the guidance in Topic 606 on [revenue](https://asc.understandingaccounting.org/glossary/r/#revenue "Inflows or other enhancements of assets of an entity or settlements of its liabilities (or a combination of both) from delivering or producing goods, rendering services, or other activities that constitute the entity's ongoing major or central operations.") from [contracts](https://asc.understandingaccounting.org/glossary/c/#contract "An agreement between two or more parties that creates enforceable rights and obligations.") with [customers](https://asc.understandingaccounting.org/glossary/c/#customer "A party that has contracted with an entity to obtain goods or services that are an output of the entity's ordinary activities in exchange for consideration."). ##### [410-20-55-29](https://asc.understandingaccounting.org/asc/410/20/#410-20-55-29) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:10.890Z to 2026-09-10T00:21:10.890Z Record version: sha256:7fa915fce7782f2f2554566649eb9d720bbdb11c24e722f0d2c6d1adb17286a1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The producer of the new asset should derecognize that liability when the obligation is settled. ##### [410-20-55-30](https://asc.understandingaccounting.org/asc/410/20/#410-20-55-30) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:10.890Z to 2026-09-10T00:21:10.890Z Record version: sha256:996706e3d2080130c232677cabfcf6514db6ee2aa70e4f76a5edef1ee4afa55d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See Example 4 (paragraph [410-20-55-63](https://asc.understandingaccounting.org/asc/410/20/#410-20-55-63)), which describes accounting for obligations associated with Directive 2002/96/EC on Waste Electrical and Electronic Equipment adopted by the European Union. That Example refers to and paraphrases various provisions of the Directive. Nothing in that Example shall be considered a definitive interpretation of any provision of the Directive for any purpose. #### Illustrations ##### [410-20-55-31](https://asc.understandingaccounting.org/asc/410/20/#410-20-55-31) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:10.890Z to 2026-09-10T00:21:10.890Z Record version: sha256:a566b8ba2d7dcb1c16beae992894fa24676ae67f95350f2a2f7e79bf8076b0c9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the guidance in paragraphs [410-20-35-5 through 35-6](https://asc.understandingaccounting.org/asc/410/20/#410-20-35-5) . After initial measurement, an entity is required to recognize period-to-period changes in an asset retirement obligation liability resulting from the passage of time (accretion expense) and revisions in cash flow estimates. To apply the subsequent measurement provisions of this Subtopic, an entity must identify undiscounted cash flows related to an asset retirement obligation liability irrespective of how the liability was initially measured. Therefore, if an entity obtains the initial fair value from a market price, it must impute undiscounted cash flows from that price. ##### [410-20-55-32](https://asc.understandingaccounting.org/asc/410/20/#410-20-55-32) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:10.890Z to 2026-09-10T00:21:10.890Z Record version: sha256:d4cb46c46d5563d5dd0dd94182140c0a0c968c4fb50d19a7c1374cc37134d117 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the subsequent measurement of a liability in situations where the initial liability is based on a market price. Assume that the liability is initially recognized at the end of period 0 when the market price is $300,000 and the entity's credit-adjusted risk-free rate is 8 percent. As required by this Subtopic, revisions in the timing or the amount of estimated cash flows are assumed to occur at the end of the period after accretion on the beginning balance of the liability is calculated. At the end of each period, the following procedure is used to impute cash flows from the end-of-period market price, compute the change in that price attributable to revisions in estimated cash flows, and calculate accretion expense: 1. a The market price and the credit-adjusted risk-free interest rate are used to impute the undiscounted cash flows embedded in the market price. 2. b The undiscounted cash flows from (a) are discounted at the initial credit-adjusted risk-free rate of 8 percent to arrive at the ending balance of the asset retirement obligation liability per the provisions of this Subtopic. 3. c The beginning balance of the asset retirement obligation liability is multiplied by the initial credit-adjusted risk-free rate of 8 percent to arrive at the amount of accretion expense per the provisions of this Subtopic. 4. d The difference between the undiscounted cash flows at the beginning of the period and the undiscounted cash flows at the end of the period represents the revision in cash flow estimates that occurred during the period. If that change is an upward revision to the undiscounted estimated cash flows, it is discounted at the current credit-adjusted risk-free rate. If that change is a downward revision, it is discounted at the historical weighted-average rate because it is not practicable to separately identify the period to which the downward revision relates. ##### [410-20-55-33](https://asc.understandingaccounting.org/asc/410/20/#410-20-55-33) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:10.890Z to 2026-09-10T00:21:10.890Z Record version: sha256:7b2435081f6eed414593bbf4e91e6e2376fb0a80db2bb1b6774a600a1430fd69 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following table illustrates the subsequent measurement of an asset retirement obligation liability obtained from a market price. - ![](https://asc.understandingaccounting.org/asc-img/GUID-56953A43-DFA1-4653-A934-160B0564C84C-low.gif) Subsequent Measurement of an Asset Retirement Obligation Liability Obtained from a Market Price End of Period 0 1 2 3 Market assumptions: Market price (includes market risk premium) " $300,000 " " $400,000 " " $350,000 " " $380,000 " Current risk-free rate adjusted for entity's credit standing 8.00% 7.00% 7.50% 7.50% Time period remaining 3 2 1 0 Imputed undiscounted cash flows (market price discounted at market rate) " $377,914 " " $457,960 " " $376,250 " " $380,000 " Change in undiscounted cash flows " 377,914 " " 80,046 " " (81,710)" " 3,750 " Discount rate: Current credit-adjusted risk-free rate (for upward revisions) 8.00% 7.00% Historical weighted-average credit-adjusted risk-free rate (for downward revisions) 7.83% Change in undiscounted cash flows discounted at credit-adjusted risk-free rate (current rate for upward revisions and historical rate for downward revisions) " $300,000 " " $69,916 " " $(75,777)" " $3,750 " ##### [410-20-55-34](https://asc.understandingaccounting.org/asc/410/20/#410-20-55-34) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:10.890Z to 2026-09-10T00:21:10.890Z Record version: sha256:285d3e0d9161924da77bb2565ccc4a5004da4026b88bdc051510a829d1895bfc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following table illustrates the measurement of liability under the provisions of the asset retirement obligation statement. - ![](https://asc.understandingaccounting.org/asc-img/GUID-C939A7D6-C1C6-4C7F-A898-7D4AF5496594-low.gif) Measurement of Liability under Provisions of Asset Retirement Obligation Statement Period Beginning Balance Accretion (8.0%) Change in Cash Flows Ending Balance 0 " $300,000 " " $300,000 " 1 " $300,000 " " $24,000 " " 324,000 " 2 " 324,000 " " 25,920 " " 349,920 " 3 " 349,920 " " 27,994 " " 377,914 " Period Beginning Balance Accretion (7.0%) Change in Cash flows Ending Balance 0 1 " $69,916 " " $69,916 " 2 " $69,916 " " $4,894 " " 74,810 " 3 " 74,810 " " 5,236 " " 80,046 " Period Beginning Balance Accretion (7.83%) Change in Cash Flows Ending Balance 0 1 2 " $(75,777)" " $(75,777)" 3 " $(75,777)" " $(5,933)" " (81,710)" Period Beginning Balance Accretion Change in Cash Flows Ending Balance 0 1 2 3 " $3,750 " " $3,750 " Total Period Beginning Balance Accretion Expense Change in Cash Flows Ending Balance 0 " $300,000 " " $300,000 " 1 " $300,000 " " $24,000 " " 69,916 " " 393,916 " 2 " 393,916 " " 30,814 " " (75,777)" " 348,953 " 3 " 348,953 " " 27,297 " " 3,750 " " 380,000 " ##### [410-20-55-35](https://asc.understandingaccounting.org/asc/410/20/#410-20-55-35) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:10.890Z to 2026-09-10T00:21:10.890Z Record version: sha256:2a4f10b0e86c8fef90a1a39292797d6a5673d07d1c45291f4f9964b669eb4809 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following Cases illustrate the recognition and measurement provisions of this Subtopic: 1. a Initial measurement of a liability for an asset retirement obligation using an expected present value technique, subsequent measurement assuming that there are no changes in expected cash flows, and settlement of the asset retirement obligation liability at the end of its term (Case A) 2. b Subsequent measurement of an asset retirement obligation liability after a change in expected cash flows (Case B) 3. c Recognition and measurement of an asset retirement obligation liability that is incurred over more than one reporting period (Case C) 4. d Accounting for asset retirement obligations that are conditional and that have a low likelihood of enforcement (Case D). ##### [410-20-55-36](https://asc.understandingaccounting.org/asc/410/20/#410-20-55-36) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:10.890Z to 2026-09-10T00:21:10.890Z Record version: sha256:2392c94115fa323214f8120ba694ea7902f60b9a72aae02c2bdca79b1a2e3b72 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Cases A, B, C, and D incorporate simplified assumptions to provide guidance in implementing this Subtopic. For instance, Cases A and B relate to the asset retirement obligation associated with an offshore production platform that also would likely have individual wells and production facilities that would have separate asset retirement obligations. Those Cases also assume straight-line depreciation, even though, in practice, depreciation would likely be applied using a units-of-production method. Other simplifying assumptions are used throughout the Cases. ##### [410-20-55-37](https://asc.understandingaccounting.org/asc/410/20/#410-20-55-37) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:10.890Z to 2026-09-10T00:21:10.890Z Record version: sha256:f54a6fe220353d8bed8732bd615b8905d1336f8e3482a555b1659e02b0d5a035 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Case depicts an entity that completes construction of and places into service an offshore oil platform on January 1, 2003. The entity is legally required to dismantle and remove the platform at the end of its useful life, which is estimated to be 10 years. Based on the requirements of this Subtopic, on January 1, 2003, the entity recognizes a liability for an asset retirement obligation and capitalizes an amount for an asset retirement cost. The entity estimates the initial fair value of the liability using an expected present value technique. The significant assumptions used in that estimate of fair value are as follows: 1. a Labor costs are based on current marketplace wages required to hire contractors to dismantle and remove offshore oil platforms. The entity assigns probability assessments to a range of cash flow estimates as follows. - ![](https://asc.understandingaccounting.org/asc-img/GUID-9B5EFC01-0264-4216-A87C-C41F345F4F70-low.gif) Cash Flow Estimate Probability Assessment Expected Cash Flows " $100,000 " 25% " $25,000 " " 125,000 " 50 " 62,500 " " 175,000 " 25 " 43,750 " " $131,250 " 2. b The entity estimates allocated overhead and equipment charges using the rate it applies to labor costs for transfer pricing (80 percent). The entity has no reason to believe that its overhead rate differs from those used by contractors in the industry. 3. c A contractor typically adds a markup on labor and allocated internal costs to provide a profit margin on the job. The rate used (20 percent) represents the entity's understanding of the profit that contractors in the industry generally earn to dismantle and remove offshore oil platforms. 4. d A contractor would typically demand and receive a premium (market risk premium) for bearing the uncertainty and unforeseeable circumstances inherent in locking in today's price for a project that will not occur for 10 years. The entity estimates the amount of that premium to be 5 percent of the expected cash flows adjusted for inflation. 5. e The risk-free rate of interest on January 1, 2003, is 5 percent. The entity adjusts that rate by 3.5 percent to reflect the effect of its credit standing. Therefore, the credit-adjusted risk-free rate used to compute expected present value is 8.5 percent. 6. f The entity assumes a rate of inflation of 4 percent over the 10-year period. ##### [410-20-55-38](https://asc.understandingaccounting.org/asc/410/20/#410-20-55-38) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:10.890Z to 2026-09-10T00:21:10.890Z Record version: sha256:9a29dc5997a30fe63d8b736f3c3d6a0c28d4fbc669b31332cf4e371e4228f2c2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. On December 31, 2012, the entity settles its asset retirement obligation by using its internal workforce at a cost of $351,000. Assuming no changes during the 10-year period in the expected cash flows used to estimate the obligation, the entity would recognize a gain of $89,619 on settlement of the obligation. The entity would account for the asset retirement obligation as follows. - ![](https://asc.understandingaccounting.org/asc-img/GUID-A37BFCA5-D564-4FCB-B25B-DC0BB4A8F9FC-low.gif) Labor " $195,000 " Allocated overhead and equipment charges (80% of labor) " 156,000 " Total costs incurred " 351,000 " Asset retirement obligation liability " 440,619 " Gain on settlement of obligation " $89,619 " - ![](https://asc.understandingaccounting.org/asc-img/GUID-FC8F8E40-2F4F-488A-BA92-DE811F65903F-low.gif) "Initial Measurement of the Asset Retirement Obligation Liability at January 1, 2003" Expected Cash Flows 1/1/03 Expected labor costs " $131,250 " "Allocated overhead and equipment charges (.80 × $131,250)" " 105,000 " "Contractor's markup \[.20 × ($131,250 + $105,000)\]" " 47,250 " Expected cash flows before inflation adjustment " 283,500 " Inflation factor assuming 4 percent rate for 10 years 1.4802 Expected cash flows adjusted for inflation " 419,637 " "Market-risk premium (.05 × $419,637)" " 20,982 " Expected cash flows adjusted for market risk " $440,619 " Expected present value using credit-adjusted risk-free rate of 8.5 percent for 10 years " $194,879 " - ![](https://asc.understandingaccounting.org/asc-img/GUID-4C6CE17F-EEF3-4A2F-BC35-228F7149F3A6-low.gif) Interest Method of Allocation Year Liability Balance 1/1 Accretion Liability Balance 12/31 2003 " $194,879 " " $16,565 " " $211,444 " 2004 " 211,444 " " 17,973 " " 229,417 " 2005 " 229,417 " " 19,500 " " 248,917 " 2006 " 248,917 " " 21,158 " " 270,075 " 2007 " 270,075 " " 22,956 " " 293,031 " 2008 " 293,031 " " 24,908 " " 317,939 " 2009 " 317,939 " " 27,025 " " 344,964 " 2010 " 344,964 " " 29,322 " " 374,286 " 2011 " 374,286 " " 31,814 " " 406,100 " 2012 " 406,100 " " 34,519 " " 440,619 " - ![](https://asc.understandingaccounting.org/asc-img/GUID-B2951BFC-7B39-4DCE-8D7F-F3454B0C413A-low.gif) Schedule of Expenses Year-End Accretion Expense Depreciation Expense Total Expense 2003 " $16,565 " " $19,488 " " $36,053 " 2004 " 17,973 " " 19,488 " " 37,461 " 2005 " 19,500 " " 19,488 " " 38,988 " 2006 " 21,158 " " 19,488 " " 40,646 " 2007 " 22,956 " " 19,488 " " 42,444 " 2008 " 24,908 " " 19,488 " " 44,396 " 2009 " 27,025 " " 19,488 " " 46,513 " 2010 " 29,322 " " 19,488 " " 48,810 " 2011 " 31,814 " " 19,488 " " 51,302 " 2012 " 34,519 " " 19,488 " " 54,007 " - ![](https://asc.understandingaccounting.org/asc-img/GUID-B3023B97-8C38-4433-9981-470B80B858C6-low.gif) Journal Entries "January 1, 2003:" Long-lived asset (asset retirement cost) " $194,879 " Asset retirement obligation liability " $194,879 " To record the initial fair value of the asset retirement obligation liability "December 31, 2003-2012:" Depreciation expense (asset retirement cost) " 19,488 " Accumulated depreciation " 19,488 " To record straight-line depreciation on the asset retirement cost Accretion expense Per schedule Asset retirement obligation liability Per schedule To record accretion expense on the asset retirement obligation liability "December 31, 2012:" Asset retirement obligation liability " 440,619 " Wages payable " 195,000 " Allocated overhead and equipment charges " (.80 × $195,000)" " 156,000 " Gain on settlement of asset retirement obligation liability " 89,619 " To record settlement of the asset retirement obligation liability ##### [410-20-55-39](https://asc.understandingaccounting.org/asc/410/20/#410-20-55-39) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:10.890Z to 2026-09-10T00:21:10.890Z Record version: sha256:a304f6e805c7e3fca4e9d29bcd9f72ceb521988a26695895ceec7750a38f1532 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Case is the same as Case A with respect to initial measurement of the asset retirement obligation liability. In this Case, the entity's credit standing improves over time, causing the credit-adjusted risk-free rate to decrease by 0.5 percent to 8 percent at December 31, 2004. ##### [410-20-55-40](https://asc.understandingaccounting.org/asc/410/20/#410-20-55-40) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:10.890Z to 2026-09-10T00:21:10.890Z Record version: sha256:7b2106cf825f2536a594ffe009f46a7da8a6cdbcb465b0b4bcddb368640526c3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. On December 31, 2004, the entity revises its estimate of labor costs to reflect an increase of 10 percent in the marketplace. In addition, it revises the probability assessments related to those labor costs. The change in labor costs results in an upward revision to the expected cash flows; consequently, the incremental expected cash flows are discounted at the current credit-adjusted risk-free rate of 8 percent. All other assumptions remain unchanged. The revised estimate of expected cash flows for labor costs is as follows. - ![](https://asc.understandingaccounting.org/asc-img/GUID-79AB8E66-96FD-4154-83FE-8A0DEA496720-low.gif) Cash Flow Estimate Probability Assessment Expected Cash Flows " $110,000 " 30% " $33,000 " " 137,500 " 45 " 61,875 " " 192,500 " 25 " 48,125 " " $143,000 " ##### [410-20-55-41](https://asc.understandingaccounting.org/asc/410/20/#410-20-55-41) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:10.890Z to 2026-09-10T00:21:10.890Z Record version: sha256:15e1326d6a61b7dc6ec7db1146d25dfe10a299d656de08a4743518a3270d22c3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. On December 31, 2012, the entity settles its asset retirement obligation by using an outside contractor. It incurs costs of $463,000, resulting in the recognition of a $14,091 gain on settlement of the obligation. The entity would account for the asset retirement obligation as follows. - ![](https://asc.understandingaccounting.org/asc-img/GUID-D9EE6429-CBA7-4A46-AC1C-AF75DE092FA5-low.gif) Asset retirement obligation liability " $477,091 " Outside contractor " 463,000 " Gain on settlement of obligation " $14,091 " - ![](https://asc.understandingaccounting.org/asc-img/GUID-11CA7D35-9C36-4A31-89A1-3353FC7B9DBE-low.gif) "Initial Measurement of the Asset Retirement Obligation Liability at January 1, 2003" Expected Cash Flows 1/1/03 Expected labor costs " $131,250 " "Allocated overhead and equipment charges (.80 × $131,250)" " 105,000 " "Contractor's markup \[.20 × ($131,250 + $105,000)\]" " 47,250 " Expected cash flows before inflation adjustment " 283,500 " Inflation factor assuming 4 percent rate for 10 years 1.4802 Expected cash flows adjusted for inflation " 419,637 " "Market-risk premium (.05 × $419,637)" " 20,982 " Expected cash flows for market risk " $440,619 " Present value using credit-adjusted risk-free rate of 8.5 percent for 10 years " $194,879 " "Subsequent Measurement of the Asset Retirement Obligation Liability Reflecting a Change in Labor Cost Estimate as of December 31, 2004" Incremental Expected Cash Flows 12/31/04 "Incremental expected labor costs ($143,000 - $131,250)" " $11,750 " "Allocated overhead and equipment charges (.80 × $11,750)" " 9,400 " "Contractor's markup \[.20 × ($11,750 + $9,400)\]" " 4,230 " Expected cash flows before inflation adjustment " 25,380 " Inflation factor assuming 4 percent rate for 8 years 1.3686 Expected cash flows adjusted for inflation " 34,735 " "Market-risk premium (.05 × $34,735)" " 1,737 " Expected cash flows adjusted for market risk " $36,472 " Expected present value of incremental liability using credit-adjusted risk-free rate of 8 percent for 8 years " $19,704 " - ![](https://asc.understandingaccounting.org/asc-img/GUID-69AAD0B6-5F42-4671-AC2F-32F612BEFB71-low.gif) Interest Method of Allocation Year Liability Balance 1/1 Accretion Change in Cash Flow Estimate Liability Balance 12/31 2003 " $194,879 " " $16,565 " " $211,444 " 2004 " 211,444 " " 17,973 " " $19,704 " " 249,121 " (a) 2005 " 249,121 " " 21,078 " " 270,199 " 2006 " 270,199 " " 22,862 " " 293,061 " 2007 " 293,061 " " 24,796 " " 317,857 " 2008 " 317,857 " " 26,894 " " 344,751 " 2009 " 344,751 " " 29,170 " " 373,921 " 2010 " 373,921 " " 31,638 " " 405,559 " 2011 " 405,559 " " 34,315 " " 439,874 " 2012 " 439,874 " " 37,217 " " 477,091 " Schedule of Expenses Year-End Accretion Expense Depreciation Expense Total Expense 2003 " $16,565 " " $19,488 " " $36,053 " 2004 " 17,973 " " 19,488 " " 37,461 " 2005 " 21,078 " " 21,951 " " 43,029 " 2006 " 22,862 " " 21,951 " " 44,813 " 2007 " 24,796 " " 21,951 " " 46,747 " 2008 " 26,894 " " 21,951 " " 48,845 " 2009 " 29,170 " " 21,951 " " 51,121 " 2010 " 31,638 " " 21,951 " " 53,589 " 2011 " 34,315 " " 21,951 " " 56,266 " 2012 " 37,217 " " 21,951 " " 59,168 " (a) "The remainder of this table is an aggregation of 2 layers: the original liability, which is accreted at a rate of 8.5%, and the new incremental liability, which is accreted at a rate of 8.0%." - ![](https://asc.understandingaccounting.org/asc-img/GUID-3BC08C01-CABA-4935-9878-139956508A73-low.gif) Journal Entries "January 1, 2003:" Long-lived asset (asset retirement cost) " $194,879 " Asset retirement obligation liability " $194,879 " To record the initial fair value of the asset retirement obligation liabiity "December 31, 2003:" Depreciation expense (asset retirement cost) " 19,488 " Accumulated depreciation " 19,488 " To record straight-line depreciation on the asset retirement cost Accretion expense " 16,565 " Asset retirement obligation liability " 16,565 " To record accretion expense on the asset retirement obligation liability "December 31, 2004:" Depreciation expense (asset retirement cost) " 19,488 " Accumulated depreciation " 19,488 " To record straight-line depreciation on the asset retirement cost Accretion expense " 17,973 " Asset retirement obligation liability " 17,973 " To record accretion expense on the asset retirement obligation liability Long-lived asset (asset retirement cost) " 19,704 " Asset retirement obligation liability " 19,704 " To record the change in estimated cash flows "December 31, 2005-2012:" Depreciation expense (asset retirement cost) " 21,951 " Accumulated depreciation " 21,951 " To record straight-line depreciation on the asset retirement cost adjusted for the change in cash flow estimate Accretion expense Per schedule Asset retirement obligation liability Per schedule To record accretion expense on the asset retirement obligation liability "December 31, 2012:" Asset retirement obligation liability " 477,091 " Gain on settlement of asset retirement obligation liability " 14,091 " Accounts payable (outside contractor) " 463,000 " To record settlement of the asset retirement obligation liability ##### [410-20-55-42](https://asc.understandingaccounting.org/asc/410/20/#410-20-55-42) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:10.890Z to 2026-09-10T00:21:10.890Z Record version: sha256:09c09339b598a990d05df27a6517d9f77e7497807a42efc4feac3617e685dfcc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Case depicts an entity that places a nuclear utility plant into service on December 31, 2003. The entity is legally required to decommission the plant at the end of its useful life, which is estimated to be 20 years. Based on the requirements of this Subtopic, the entity recognizes a liability for an asset retirement obligation and capitalizes an amount for an asset retirement cost over the life of the plant as contamination occurs. The following schedule reflects the expected cash flows and respective credit-adjusted risk-free rates used to measure each portion of the liability through December 31, 2005, at which time the plant is 90 percent contaminated. - ![](https://asc.understandingaccounting.org/asc-img/GUID-A96529CB-C0F0-49B0-ABD5-74F651045A05-low.gif) Date Expected Cash Flows Credit-Adjusted Risk-Free Rate 12/31/03 " $23,000 " 9.0% 12/31/04 " 1,150 " 8.5 12/31/05 " 1,900 " 9.2 ##### [410-20-55-43](https://asc.understandingaccounting.org/asc/410/20/#410-20-55-43) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:10.890Z to 2026-09-10T00:21:10.890Z Record version: sha256:419206564072b2fff0f958493a08da829f0f9a929427694132ef5eb572a8f77b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. On December 31, 2005, the entity increases by 10 percent its estimate of expected cash flows that were used to measure those portions of the liability recognized on December 31, 2003, and December 31, 2004, which results in an upward revision to the expected cash flows. Accordingly, the incremental expected cash flows of $2,415 \[$2,300 (10 percent of $23,000) plus $115 (10 percent of $1,150)\] are discounted at the then-current credit-adjusted risk-free rate of 9.2 percent and recorded as a liability on December 31, 2005. The entity would account for the asset retirement obligation as follows. - ![](https://asc.understandingaccounting.org/asc-img/GUID-CD5F58B5-58B9-4819-8F97-2183BDF15AA1-low.gif) Date Incurred 12/31/03 12/31/04 12/31/05 Initial measurement of the asset retirement obligation liability: Expected cash flows adjusted for market risk " $23,000 " " $1,150 " " $1,900 " Credit-adjusted risk-free rate 9.00% 8.50% 9.20% Discount period in years 20 19 18 Expected present value " $4,104 " $244 $390 "Measurement of incremental expected cash flows occurring on December 31, 2005:" Incremental expected cash flows (increase of 10 percent) " $2,415 " "Credit-adjusted risk-free rate at December 31, 2005" 9.20% Discount period remaining in years 18 Expected present value $495 - ![](https://asc.understandingaccounting.org/asc-img/GUID-2ACD6483-87E5-4B98-86C0-1FC980F6143E-low.gif) Carrying Amount of Liability Incurred in 2003 Year Liability Balance 1/1 Accretion (9.0%) New Liability Liability Balance 12/31 2003 " $4,104 " " $4,104 " 2004 " $4,104 " $369 " 4,473 " 2005 " 4,473 " 403 " 4,876 " Carrying Amount of Liability Incurred in 2004 Year Liability Balance 1/1 Accretion (8.5%) New Liability Liability Balance 12/31 2004 $244 $244 2005 $244 $21 265 - ![](https://asc.understandingaccounting.org/asc-img/GUID-76EA5E6E-A596-4092-9996-F71955E193F0-low.gif) "Carrying Amount of Liability Incurred in 2005 Plus Effect of Change in Expected Cash Flows" Year Liability Balance 1/1 Accretion (9.2%) Change in Estimate New Liability Liability Balance 12/31 2005 $495 $390 $885 Carrying Amount of Total Liability Year Liability Balance 1/1 Accretion Change in Estimate New Liability Total Carrying Amount 12/31 2003 " $4,104 " " $4,104 " 2004 " $4,104 " $369 244 " 4,717 " 2005 " 4,717 " 424 $495 390 " 6,026 " - ![](https://asc.understandingaccounting.org/asc-img/GUID-954B61E6-DE4C-45F3-A819-64911E40CFE9-low.gif) Journal Entries "December 31, 2003:" Long-lived asset (asset retirement cost) " $4,104 " Asset retirement obligation liability " $4,104 " To record the initial fair value of the asset retirement obligation liability incurred this period "December 31, 2004:" "Depreciation expense ($4,104 ÷ 20)" 205 Accumulated depreciation 205 To record straight-line depreciation on the asset retirement cost Accretion expense 369 Asset retirement obligation liability 369 To record accretion expense on the asset retirement obligation liability Long-lived asset (asset retirement cost) 244 Asset retirement obligation liability 244 To record the initial fair value of the asset retirement obligation liability incurred this period "December 31, 2005:" "Depreciation expense \[($4,104 ÷ 20) + ($244 ÷ 19)\]" 218 Accumulated depreciation 218 To record straight-line depreciation on the asset retirement cost Accretion expense 424 Asset retirement obligation liability 424 To record accretion expense on the asset retirement obligation liability Long-lived asset (asset retirement cost) 495 Asset retirement obligation liability 495 To record the change in liability resulting from a revision in expected cash flow Long-lived asset (asset retirement cost) 390 Asset retirement obligation liability 390 To record the initial fair value of the asset retirement obligation liability incurred this period ##### [410-20-55-44](https://asc.understandingaccounting.org/asc/410/20/#410-20-55-44) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:10.890Z to 2026-09-10T00:21:10.890Z Record version: sha256:9cfaeb39f08578aadf94db293d1d1d2a82a90c42a185ceb4db636c922f97e4ee Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Case illustrates a timber lease in which the [lessor](https://asc.understandingaccounting.org/glossary/l/#lessor "An entity that enters into a contract to provide the right to use an underlying asset for a period of time in exchange for consideration.") has an option to require the [lessee](https://asc.understandingaccounting.org/glossary/l/#lessee "An entity that enters into a contract to obtain the right to use an underlying asset for a period of time in exchange for consideration.") to settle an asset retirement obligation. Assume an entity enters into a five-year [lease](https://asc.understandingaccounting.org/glossary/l/#lease "A contract, or part of a contract, that conveys the right to control the use of identified property, plant, or equipment (an identified asset) for a period of time in exchange for consideration.") that grants it the right to harvest timber on a tract of land and that agreement grants the lessor an option to require that the lessee reforest the underlying land at the end of the [lease term](https://asc.understandingaccounting.org/glossary/l/#lease-term "The noncancellable period for which a lessee has the right to use an underlying asset, together with all of the following: Periods covered by an option to extend the lease if the lessee is reasonably certain to exercise that option Periods covered by an option to terminate the lease if the lessee is reasonably certain not to exercise that option Periods covered by an option to extend (or not to terminate) the lease in which exercise of the option is controlled by the lessor."). Based on past history, the lessee believes that the likelihood that the lessor will exercise that option is low. Rather, at the end of the lease, the lessor will likely accept the land without requiring reforestation. The lessee estimates that there is only a 10 percent probability that the lessor will elect to enforce reforestation. Paragraph [842-10-15-1](https://asc.understandingaccounting.org/asc/842/10/#842-10-15-1) explains that Topic 842 does not apply to leases of biological assets, including timber. ##### [410-20-55-45](https://asc.understandingaccounting.org/asc/410/20/#410-20-55-45) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:10.890Z to 2026-09-10T00:21:10.890Z Record version: sha256:7decc4c6e0f9b8d889d372a68ba632d425270b5f05991bba41e7cc04bc8cf374 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. At the end of the first year, 20 percent of the timber has been harvested. The lessee estimates that the possible cash flows associated with performing reforestation activities in 4 years for the portion of the land that has been harvested will be $300,000. When estimating the fair value of the asset retirement obligation liability to be recorded (using an expected present value technique), the lessee incorporates the probability that the restoration provisions will not be enforced. - ![](https://asc.understandingaccounting.org/asc-img/GUID-A6B82EC5-2001-437B-A9A0-3201A5D01AF7-low.gif) Possible Cash Flows Probability Assessment Expected Cash Flows " $300,000 " 10% " $30,000 " - 90 - " $30,000 " Expected present value using credit-adjusted risk-free rate of 8.5 percent for 4 years " $21,647 " ##### [410-20-55-46](https://asc.understandingaccounting.org/asc/410/20/#410-20-55-46) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:10.890Z to 2026-09-10T00:21:10.890Z Record version: sha256:2fa8ead15257d9e12329fdc43952a38c4dcf076a25de171ef2933ddf708737cb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. During the term of the lease, the lessee should reassess the likelihood that the lessor will require reforestation. For example, if the lessee subsequently determines that the likelihood of the lessor electing the reforestation option has increased, that change will result in a change in the expected cash flows and be accounted for as illustrated in Case B. ##### [410-20-55-47](https://asc.understandingaccounting.org/asc/410/20/#410-20-55-47) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:10.890Z to 2026-09-10T00:21:10.890Z Record version: sha256:c8c35caba99c0d008287a63242754fda8ddc40b5b202321075a777303d2cd09c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example includes four Cases that illustrate when an entity would be required to recognize the fair value of an asset retirement obligation. The Cases do not provide specific guidance for determining when an entity has sufficient information to reasonably estimate the fair value of the asset retirement obligation. The determination as to when an entity has sufficient information to reasonably estimate the fair value of an asset retirement obligation should be based on the guidance in paragraphs [410-20-25-8 through 25-11](https://asc.understandingaccounting.org/asc/410/20/#410-20-25-8) . The Cases illustrate the initial recognition of a [conditional asset retirement obligation](https://asc.understandingaccounting.org/glossary/c/#conditional-asset-retirement-obligation "A legal obligation to perform an asset retirement activity in which the timing and (or) method of settlement are conditional on a future event that may or may not be within the control of the entity.") based on the facts presented. Any differences in facts from those presented in the Cases may result in different conclusions. ##### [410-20-55-48](https://asc.understandingaccounting.org/asc/410/20/#410-20-55-48) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:10.890Z to 2026-09-10T00:21:10.890Z Record version: sha256:c55466ce5b4b8a0ec335e7eaaa770a176f7525a01970321c087464ab21743352 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following Cases illustrate the guidance in paragraphs [410-20-25-7 through 25-11](https://asc.understandingaccounting.org/asc/410/20/#410-20-25-7) and [410-20-30-1](https://asc.understandingaccounting.org/asc/410/20/#410-20-30-1): 1. a An entity has sufficient information to reasonably estimate the fair value of an asset retirement obligation at the time the obligation is incurred (Cases A and B). 2. b An entity does not have sufficient information to reasonably estimate the fair value of an asset retirement obligation at the time the obligation is incurred (Case C). 3. c An entity initially does not have sufficient information and later has sufficient information to reasonably estimate the fair value of an asset retirement obligation (Case D). ##### [410-20-55-49](https://asc.understandingaccounting.org/asc/410/20/#410-20-55-49) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:10.890Z to 2026-09-10T00:21:10.890Z Record version: sha256:9635e8cef7b446eb12e8e9f3fa4929e3cfee29b0e07befdf1291b7ee76d5dd8a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Assume a telecommunications entity owns and operates a communication network that uses wood poles that are treated with certain chemicals. There is no legal requirement to remove the poles from the ground. However, the owner may replace the poles periodically for a number of operational reasons. Once the poles are removed from the ground, they may be disposed of, sold, or reused as part of other activities. There is existing legislation that requires special disposal procedures for the poles in the particular state in which the entity operates. ##### [410-20-55-50](https://asc.understandingaccounting.org/asc/410/20/#410-20-55-50) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:10.890Z to 2026-09-10T00:21:10.890Z Record version: sha256:463efa457497bfe7b9461fed9a8d4e77dce9c272d72382b9e24aa403e93a5c56 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. At the date of purchase of the treated poles, the entity has the information to estimate a range of potential settlement dates, the potential methods of settlement, and the probabilities associated with the potential settlement dates and methods based on established industry practice. Therefore, at the date of purchase, the entity is able to estimate the fair value of the liability for the required disposal procedures using an expected present value technique. ##### [410-20-55-51](https://asc.understandingaccounting.org/asc/410/20/#410-20-55-51) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:10.890Z to 2026-09-10T00:21:10.890Z Record version: sha256:992ae7a4fc1e337d841e204ae451f5279e01d6402347f7312850ed114204fbf0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Although the timing of the performance of the asset retirement activity is conditional on removing the poles from the ground and disposing of them, existing legislation creates a duty or responsibility for the entity to dispose of the poles in accordance with special procedures, and the obligating event occurs when the entity purchases the treated poles. Although the entity may decide not to remove the poles from the ground or may decide to reuse the poles and thereby defer settlement of the obligation, the ability to defer settlement does not relieve the entity of the obligation. The poles will eventually need to be disposed of using special procedures, because the poles will not last forever. Additionally, the ability of the entity to sell the poles prior to disposal does not relieve the entity of its present duty or responsibility to settle the obligation. The sale of the poles transfers the obligation to another entity. The assumption of the obligation by the buyer affects the exchange price. The bargaining of the exchange price reflects the buyer's and seller's individual estimates of the timing and (or) amount of the cost to extinguish the obligation. ##### [410-20-55-52](https://asc.understandingaccounting.org/asc/410/20/#410-20-55-52) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:10.890Z to 2026-09-10T00:21:10.890Z Record version: sha256:eb6703e63be6f90e5f5b58679f6c3c99e36108d6eea65c5753aaf73d06f8011c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The asset retirement obligation should be recognized when the entity purchases the poles because the entity has sufficient information to estimate the fair value of the asset retirement obligation. Because the legal requirement relates only to the disposal of the treated poles, the cost to remove the poles is not included in the asset retirement obligation. However, if there was a legal requirement to remove the treated poles, the cost of removal would be included. ##### [410-20-55-53](https://asc.understandingaccounting.org/asc/410/20/#410-20-55-53) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:10.890Z to 2026-09-10T00:21:10.890Z Record version: sha256:57839a3d93792810c4dcf78956e4cbe260ff05a4676aef8db6cb1ada6b02bd5d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Assume an entity recently purchased several kilns lined with a special type of brick. As of the date of purchase, the kilns had not yet been used in any smelting processes. The kilns have a long useful life, but the bricks are replaced periodically. Because the bricks become contaminated with hazardous chemicals while the kiln is operated, a state law requires that when the bricks are removed, they must be disposed of at a special hazardous waste site. The entity has the information to estimate a range of potential settlement dates, the method of settlement, and the probabilities associated with the potential settlement dates based on its past practice of replacing the bricks to maintain the efficient operation of the kiln. ##### [410-20-55-54](https://asc.understandingaccounting.org/asc/410/20/#410-20-55-54) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:10.890Z to 2026-09-10T00:21:10.890Z Record version: sha256:7f8a91c0fe640412e4d53a5b66be5fea6b8acd89d48388c3484da1207b138a0d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Therefore, at the date the bricks become contaminated because of the operation of the kiln, the entity is able to estimate the fair value of the liability for the required disposal procedures using an expected present value technique. ##### [410-20-55-55](https://asc.understandingaccounting.org/asc/410/20/#410-20-55-55) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:10.890Z to 2026-09-10T00:21:10.890Z Record version: sha256:e010158d0b8cee73c7b3e8f7ed3a10e2d15b5c7e1222709235f795ae5ef4b48b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Although performance of the asset retirement activity is conditional on removing the bricks from the kiln, existing legislation creates a duty or responsibility for the entity to dispose of the bricks at a special hazardous waste site, and the obligating event occurs when the entity contaminates the bricks. As of the purchase date, the kilns have not yet been used in any smelting processes, and the bricks have not yet been contaminated. Therefore, at the date of purchase, no obligation exists because the bricks have not been contaminated and could be disposed of without performing any special disposal activities. ##### [410-20-55-56](https://asc.understandingaccounting.org/asc/410/20/#410-20-55-56) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:10.890Z to 2026-09-10T00:21:10.890Z Record version: sha256:e9f248539a30122a3520951c87cb28562c21b7b683ba4e6b2262836e30b061c6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The fair value of the asset retirement obligation should be recognized once the kilns have been placed into operation and the bricks are contaminated. Although the entity may decide not to remove the bricks from the kiln and thereby defer settlement of the obligation, the ability to defer settlement does not relieve the entity of the obligation. The contaminated bricks will eventually need to be removed and disposed of at a special hazardous waste site, because a kiln will not last forever. Therefore, the obligation to perform the asset retirement activity is unconditional even though uncertainty exists about the timing of settlement. An asset retirement obligation should be recognized once the kilns have been placed into operation and the bricks are contaminated because the entity has sufficient information to estimate the fair value of the asset retirement obligation. The asset retirement obligation is the requirement to dispose of the contaminated bricks at a special hazardous waste site. The cost to remove the bricks is not part of the obligation and should be accounted for as a maintenance or replacement activity. ##### [410-20-55-57](https://asc.understandingaccounting.org/asc/410/20/#410-20-55-57) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:10.890Z to 2026-09-10T00:21:10.890Z Record version: sha256:3226dad257c36a973b1c1110a26bbb14daaa4cffc992754224ece27958a3170d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Assume an entity acquires a factory that contains asbestos. After the acquisition date, regulations are put in place that require the entity to handle and dispose of this type of asbestos in a special manner if the factory undergoes major renovations or is demolished. Otherwise, the entity is not required to remove the asbestos from the factory. The entity has several options to retire the factory in the future including demolishing, selling, or abandoning it. The entity believes it does not have sufficient information to estimate the fair value of the asset retirement obligation because the settlement date or the range of potential settlement dates has not been specified by others and information is not available to apply an expected present value technique. For example, there are no plans or expectation of plans to undertake a major renovation that would require removal of the asbestos or demolition of the factory. The factory is expected to be maintained by repairs and maintenance activities that would not involve the removal of the asbestos. Also, the need for major renovations caused by technology changes, operational changes, or other factors has not been identified. ##### [410-20-55-58](https://asc.understandingaccounting.org/asc/410/20/#410-20-55-58) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:10.890Z to 2026-09-10T00:21:10.890Z Record version: sha256:1b61c454a7cf820e4fbd55785567d4eebf891013d1c89b1eaf5f2978a431a1d0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Although the timing of the performance of the asset retirement activity is conditional on the factory undergoing major renovations or being demolished, existing regulations create a duty or responsibility for the entity to remove and dispose of asbestos in a special manner, and the obligating event occurs when the regulations are put in place. Therefore, an asset retirement obligation should be recognized when regulations are put in place if the entity can reasonably estimate the fair value of the liability. In this Case, the entity believes that there is an indeterminate settlement date for the asset retirement obligation because the range of time over which the entity may settle the obligation is unknown or cannot be estimated. Therefore, the entity cannot reasonably estimate the fair value of the liability. Accordingly, the entity would not recognize a liability for the asset retirement obligation when regulations are put in place, but it should disclose a description of the obligation, the fact that a liability has not been recognized because the fair value cannot be reasonably estimated, and the reasons why fair value cannot be reasonably estimated. The entity would recognize a liability in the period in which sufficient information is available to reasonably estimate its fair value. ##### [410-20-55-59](https://asc.understandingaccounting.org/asc/410/20/#410-20-55-59) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:10.890Z to 2026-09-10T00:21:10.890Z Record version: sha256:9cd9177ffb1483e76fbac379d9d54a0aa95eaebbcb82235f956107786a03285a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Assume an entity acquires a factory that contains asbestos. At the acquisition date, regulations are in place that require the entity to handle and dispose of this type of asbestos in a special manner if the factory undergoes major renovations or is demolished. Otherwise, the entity is not required to remove the asbestos from the factory. The entity has several options to retire the factory in the future including demolishing, selling, or abandoning it. At the acquisition date, it is not evident that the fair value of the obligation is embodied in the acquisition price of the factory because both the seller and the buyer of the factory believed the obligation had an indeterminate settlement date, an active market does not exist for the transfer of the obligation, and sufficient information does not exist to apply an expected present value technique. Ten years after the acquisition date, the entity obtains additional information based on changes in demand for the products manufactured at that factory. At that time, the entity has the information to estimate a range of potential settlement dates, the potential methods of settlement, and the probabilities associated with the potential settlement dates and potential methods of settlement. Therefore, at that time the entity is able to estimate the fair value of the liability for the special handling of the asbestos using an expected present value technique. ##### [410-20-55-60](https://asc.understandingaccounting.org/asc/410/20/#410-20-55-60) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:10.890Z to 2026-09-10T00:21:10.890Z Record version: sha256:f6007a3911d0db0c73fecfbf32a565c53e2f562e917da654a6ceed8c8473858f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Although timing of the performance of the asset retirement activity is conditional on the factory undergoing major renovations or being demolished, existing regulations create a duty or responsibility for the entity to remove and dispose of asbestos in a special manner, and the obligating event occurs when the entity acquires the factory. In this Case, regulations are in place at the date of acquisition that require the entity to handle and dispose of the asbestos in a special manner. Therefore, the obligating event is the acquisition of the factory. If regulations were enacted after the date of acquisition, the obligating event would be the enactment of the regulations (see Case C). ##### [410-20-55-61](https://asc.understandingaccounting.org/asc/410/20/#410-20-55-61) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:10.890Z to 2026-09-10T00:21:10.890Z Record version: sha256:3b33f4cf6f656b8b2a77537457ef48629fb2a200b012e1dc380093f7b3dded12 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Although the entity may decide to abandon the factory and thereby defer settlement of the obligation for the foreseeable future, the ability to defer settlement does not relieve the entity of the obligation. The asbestos will eventually need to be removed and disposed of in a special manner, because no building will last forever. Additionally, the ability of the entity to sell the factory does not relieve the entity of its present duty or responsibility to settle the obligation. The sale of the asset would transfer the obligation to another entity and that transfer would affect the selling price. Therefore, the obligation to perform the asset retirement activity is unconditional even though uncertainty exists about the timing and method of settlement. ##### [410-20-55-62](https://asc.understandingaccounting.org/asc/410/20/#410-20-55-62) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:10.890Z to 2026-09-10T00:21:10.890Z Record version: sha256:e099ec89fe557d901539c3ed035cdf3e9b2352d6ec0054e32904b85cbf8a3ed8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In this Case, an asset retirement obligation is not recognized when the entity acquires the factory because the entity does not have sufficient information to estimate the fair value of the obligation. The entity would disclose a description of the obligation, the fact that a liability has not been recognized because the fair value cannot be reasonably estimated, and the reasons why fair value cannot be reasonably estimated. An asset retirement obligation would be recognized by this entity 10 years after the acquisition date because that is when the entity has sufficient information to estimate the fair value of the asset retirement obligation. ##### [410-20-55-63](https://asc.understandingaccounting.org/asc/410/20/#410-20-55-63) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:10.890Z to 2026-09-10T00:21:10.890Z Record version: sha256:e6175f5980dcacf4ecd180aa5723397c447fd5e714385126e82948ee3e3890e8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the guidance in paragraphs [410-20-55-23 through 55-29](https://asc.understandingaccounting.org/asc/410/20/#410-20-55-23) . ##### [410-20-55-64](https://asc.understandingaccounting.org/asc/410/20/#410-20-55-64) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:10.890Z to 2026-09-10T00:21:10.890Z Record version: sha256:1a21fd4bb86b7d43ff195bf5d6bac18360c14d2a3626764554bc4aee41407bb5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Assume an entity (a commercial user) is currently using electronic equipment that must be disposed of in accordance with the requirements of EU Directive 2002/96/EC. The EU-member country has not yet adopted the legislation. The entity has the ability either to replace the equipment or to dispose of the equipment without replacing it. In the EU-member country in which the entity operates, the producer of the replacement equipment will be wholly responsible for disposal costs if and when the equipment is replaced. The recycling of electronic waste equipment is not a revenue-generating business activity of the producer. ##### [410-20-55-65](https://asc.understandingaccounting.org/asc/410/20/#410-20-55-65) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:10.890Z to 2026-09-10T00:21:10.890Z Record version: sha256:c73bc776482c343ec345ae0fbff4a81619041b1d9fbe298b2b126dbbbe425269 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Upon the adoption of the legislation, the entity should recognize a liability for the fair value of the asset retirement obligation. Upon initial recognition of a liability, the entity should capitalize an asset retirement cost by increasing the carrying amount of the related asset by the same amount as the liability. The accounting subsequent to the initial recognition of the asset and liability should be consistent with the guidance in paragraphs [410-20-35-3 through 35-6](https://asc.understandingaccounting.org/asc/410/20/#410-20-35-3) . ##### [410-20-55-66](https://asc.understandingaccounting.org/asc/410/20/#410-20-55-66) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:10.890Z to 2026-09-10T00:21:10.890Z Record version: sha256:859808b7208b861610634b115e851047beaa2b344f57ea0d686f9f95a21e1b49 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The waste management obligation remains with the commercial user until the historical waste equipment is replaced or is disposed of by the commercial user itself. Assuming the equipment is replaced, the entity should determine the portion of the purchase price that relates to the cost of the replacement asset and the portion that relates to the assumption of the obligation by the producer. That determination should be based on the fair value of the obligation, without the sale of the new asset. The entity should recognize a gain or loss based on the difference between the carrying amount of the liability at the date of the sale and the portion of the sales price that relates to the obligation. The producer should recognize revenue for the total amount received, reduced by the fair value of the obligation, and recognize a liability for the fair value of the obligation upon transfer of the obligation from the commercial user. Assuming the equipment is disposed of by the entity rather than replaced, the entity should recognize a gain or loss based on the difference between the carrying amount of the liability at the date of the disposal and the actual cost of disposal. See paragraphs [820-10-55-77 through 55-81](https://asc.understandingaccounting.org/asc/820/10/#820-10-55-77) for an illustration of an entity required to estimate the fair value of an asset retirement obligation. ##### [410-20-55-67](https://asc.understandingaccounting.org/asc/410/20/#410-20-55-67) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:10.890Z to 2026-09-10T00:21:10.890Z Record version: sha256:c5663e5a698a73667f0b0b7646831ebfe5c91944f08503e37e5fd5cd878a5df9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For the financing of historical waste, the Directive also distinguishes between historical waste from private households and historical waste from "users other than private households" (referred to as "commercial users"). Source downloaded (UTC): 2026-09-10T00:21:14.902Z to 2026-09-10T00:21:14.902Z Record version: sha256:539e4659edfdd893428e389b178622db44496d94e7b9542bb0aae71b27955b11 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 410-20-60: 60 Relationships [Read section](https://asc.understandingaccounting.org/asc/410/20/#60-relationships) SEC content: no #### Interest ##### [410-20-60-1](https://asc.understandingaccounting.org/asc/410/20/#410-20-60-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:14.902Z to 2026-09-10T00:21:14.902Z Record version: sha256:9395cf50a3cb2182af3c990c432b1eb30a29d947d4457a2bd86916f616ac9ad7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For guidance related to capitalization of interest cost, see Subtopic 835-20. Source downloaded (UTC): 2026-09-10T00:21:20.597Z to 2026-09-10T00:21:58.125Z Record version: sha256:fe8f6e9f6dcd2b12be5ab6ea1e382c24d74c85dd50282f91b4f79336b57b5d33 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 410-30: Asset Retirement and Environmental Obligations — Environmental Obligations ### Machine-generated study aids ```json { "summary": "ASC 410-30 governs accounting for environmental remediation liabilities — obligations to clean up pollution arising from past acts under Superfund (CERCLA), RCRA corrective-action provisions, or analogous state/non-U.S. laws. Applied site by site, it uses the loss contingency model of ASC 450-20: accrue when it is probable a liability has been incurred (litigation/claim asserted or probably will be, and an unfavorable outcome probable) and the amount (or a minimum in a range) is reasonably estimable, measured as the entity's allocable share of the joint and several liability plus amounts other PRPs won't pay. Remediation costs are generally expensed as a component of operating income, with narrow capitalization exceptions and separate recognition of probable third-party recoveries as assets.", "key_points": [ "Accrual follows 450-20-25-2: probable that a liability has been incurred and reasonably estimable; in the remediation context probability has two elements — litigation/claim/assessment commenced or probable commencement, and probable unfavorable outcome (410-30-25-4), with a presumption of unfavorable outcome if the entity is associated with the site (410-30-25-6).", "Inability to estimate the total liability does not defer recognition: components that can be reasonably estimated serve as a surrogate for the minimum of the overall range, and the best estimate (or minimum of a range) must be recognized and refined as events occur (410-30-25-10 through 25-13).", "Recognition benchmarks — PRP identification, receipt of a unilateral administrative order, participation in the remedial investigation-feasibility study, completion of the feasibility study, record of decision, and remedial design through operation and maintenance — must be evaluated, but may not be used to delay recognition beyond the point the 450-20 criteria are met (410-30-25-14 through 25-15).", "Measurement is the entity's estimated allocable share of the joint and several liability plus its share of amounts that will not be paid by other PRPs or the government, with a rebuttable presumption that costs are allocated only among participating PRPs (410-30-30-1, 30-4, 30-7, 30-8).", "Included costs are incremental direct costs of the remediation effort and compensation/benefits of employees devoting significant time to it, based on enacted laws and adopted regulations, estimated at the cost when the work is expected to be performed; discounting is permitted only if the amount and timing of payments are fixed or reliably determinable (410-30-30-10, 30-15, 30-17, 410-30-35-12).", "Remediation costs are generally charged to expense and reported in operating income, with recovery credits in the same line item; capitalization is allowed only if costs are recoverable and they improve the property versus its original condition, prevent future contamination, or ready property held for sale (410-30-25-16, 25-18, 410-30-45-4).", "A recovery asset is recognized only when realization of the claim is probable, measured independently of the liability, with a rebuttable presumption that realization is not probable if the claim is in litigation; disclosure must state whether the accrual is discounted, and if so the undiscounted amount and discount rate (410-30-35-8, 35-9, 410-30-50-4, 50-7)." ], "categories": [ "Recognition", "Subsequent measurement", "Contingencies and guarantees", "Disclosure" ], "audience_level": "intermediate", "student_note": "This is the classic overlay of ASC 450-20 loss contingency mechanics on Superfund/CERCLA facts, so exam questions test when accrual is triggered and how much. The most common mistake is waiting for total site costs (or the final PRP allocation) to be known — GAAP requires accruing the reasonably estimable components or minimum of the range now and refining later; also don't confuse 410-30 (past contamination, remediation) with 410-20 asset retirement obligations arising from normal operation of a long-lived asset.", "related_topics": [ "450-20", "410-20", "275-10", "250-10", "210-20", "855-10" ], "key_concepts": [ "environmental remediation liability", "potentially responsible party", "joint and several liability", "allocable share", "recognition benchmarks", "remedial investigation-feasibility study", "third-party recoveries", "loss contingency" ] } ``` Source downloaded (UTC): 2026-09-10T00:21:20.597Z to 2026-09-10T00:21:20.597Z Record version: sha256:de3199c006a647bc0e0909436355a1e399318eac5785a445ca9ea757f499e135 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 410-30-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/410/30/#00-status) SEC content: no ##### [410-30-00-1](https://asc.understandingaccounting.org/asc/410/30/#410-30-00-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:20.597Z to 2026-09-10T00:21:20.597Z Record version: sha256:46b9891b794ce3e9a6522a164361f5045b3a44134bbe9fb29a0e1ae13fe035bb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following table identifies the changes made to this Subtopic.
ParagraphActionAccounting Standards UpdateDate
Orphan Share Potentially Responsible PartyAddedAccounting Standards Update No. 2014-0603/14/2014
Participating Potentially Responsible PartyAddedAccounting Standards Update No. 2014-0603/14/2014
Potentially Responsible PartyAddedAccounting Standards Update No. 2014-0603/14/2014
Recalcitrant Potentially Responsible PartyAddedAccounting Standards Update No. 2014-0603/14/2014
Unknown Potentially Responsible PartyAddedAccounting Standards Update No. 2014-0603/14/2014
Unproven Potentially Responsible PartyAddedAccounting Standards Update No. 2014-0603/14/2014
410-30-25-4AmendedAccounting Standards Update No. 2012-0410/01/2012
410-30-25-17AmendedAccounting Standards Update No. 2025-1212/17/2025
410-30-30-1AmendedAccounting Standards Update No. 2014-0603/14/2014
410-30-30-2AmendedAccounting Standards Update No. 2014-0603/14/2014
410-30-35-7SupersededAccounting Standards Update No. 2015-1006/12/2015
410-30-35-10AmendedAccounting Standards Update No. 2012-0410/01/2012
410-30-45-3SupersededAccounting Standards Update No. 2015-0101/09/2015
410-30-45-6SupersededAccounting Standards Update No. 2015-0101/09/2015
Source downloaded (UTC): 2026-09-10T00:21:23.089Z to 2026-09-10T00:21:23.089Z Record version: sha256:0edc0595583a8e1792e0eb84d011be33e332a855c860149fe3e3eb623efe2e71 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 410-30-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/410/30/#05-overview-and-background) SEC content: no ##### [410-30-05-1](https://asc.understandingaccounting.org/asc/410/30/#410-30-05-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:23.089Z to 2026-09-10T00:21:23.089Z Record version: sha256:a07b87042b4450d1200ca536ba904f6301378cb6a349771e094f08ed8d0ca395 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic provides guidance on accounting for environmental remediation liabilities and is written in the context of operations taking place in the United States; however, the accounting guidance is applicable to all the operations of the reporting entity. ##### [410-30-05-2](https://asc.understandingaccounting.org/asc/410/30/#410-30-05-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:23.089Z to 2026-09-10T00:21:23.089Z Record version: sha256:597e2a9375469f214508e832fd94239cfff221dd8c399df3d63986e6c7fd0460 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The objective of this Overview and Background Section is to provide an overview of important environmental laws and regulations. It is intended to be nonauthoritative. The summary of legal matters contained in this Section represents an understanding of the legal requirements and practices at the time that these environmental laws were initially enacted. Any references to the various laws, rules, regulations established by others shall not be considered definitive interpretations of such laws, rules, and regulations for any purpose. Laws, rules and regulations may change over time and the standard Financial Accounting Standards Board (FASB) process will not update the Codification for such changes. The FASB assumes no responsibility for the accuracy of the legal guidance included here. Therefore, users must evaluate the current laws, rules, and regulations. ##### [410-30-05-3](https://asc.understandingaccounting.org/asc/410/30/#410-30-05-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:23.089Z to 2026-09-10T00:21:23.089Z Record version: sha256:7c384ba806054589636b1250546c9e7ed04d82800fa18b505f0195b81fd84ca0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Although this Section focuses on both state and federal U. S. laws and regulations, environmental considerations are also important for foreign operations. Environmental laws and regulations in many countries are similar to U. S. laws. The legal and regulatory climates in other countries are evolving. Regardless of whether the host countries' environmental laws are as stringent as those in the United States, entities can often be held liable for environmental damages under a variety of nonenvironmental statutes and broad legal theories. ##### [410-30-05-4](https://asc.understandingaccounting.org/asc/410/30/#410-30-05-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:23.089Z to 2026-09-10T00:21:23.089Z Record version: sha256:5e9f0c49cf97894a1d859ac9ea4eacdace37a9ba57ef8ff373a937c2b2927e80 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Section is organized as follows: 1. a Environmental remediation liability laws 2. b Laws intended to control or prevent pollution 3. c Other federal statutes 4. d Potentially responsible parties 5. e Strict liability 6. f Joint and several liability 7. g Mitigation of strict, joint and several, and retroactive liability 8. h Costs associated with remediation 9. i Environmental loss contingencies. #### Environmental Remediation Liability Laws ##### [410-30-05-5](https://asc.understandingaccounting.org/asc/410/30/#410-30-05-5) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:23.089Z to 2026-09-10T00:21:23.089Z Record version: sha256:ca6e60aaf56b8f07f83a4cd3cfd13a825d0c704e5232787a241b8e6230fe36a9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The first kind of environmental law, environmental remediation liability laws, includes individual statutes as well as response provisions in other statutes. The most important of these are the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended by the Superfund Amendments and the Reauthorization Act of 1986, which together are referred to as Superfund, and the [corrective action](https://asc.understandingaccounting.org/glossary/c/#corrective-action "Related to the Resource Conservation and Recovery Act of 1976: action to remedy releases from hazardous waste management units, or any other sources of releases at or from a treatment, storage, or disposal facility.") provisions of the Resource Conservation and Recovery Act of 1976. Under Superfund's current broad liability provisions, the U.S. Environmental Protection Agency may order liable parties to remediate sites or use Superfund money to remediate them and then seek to recover its costs and additional damages. Similarly, under the corrective action provisions of the Resource Conservation and Recovery Act of 1976, the Environmental Protection Agency may order "facilities that treat, store, or dispose of hazardous waste" to clean up releases of [hazardous waste constituents](https://asc.understandingaccounting.org/glossary/h/#hazardous-waste-constituent "A constituent that caused the waste to be listed as a hazardous waste under the Resource Conservation and Recovery Act of 1976 40 CFR Part 261 Subpart D.") associated with past or ongoing practices. ##### [410-30-05-6](https://asc.understandingaccounting.org/asc/410/30/#410-30-05-6) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:23.089Z to 2026-09-10T00:21:23.089Z Record version: sha256:434f42370bbd3b2bb412abdadb337951b517f7b073d983c351db109d6f840b1b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Congress enacted the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 in 1980 to facilitate the remediation of abandoned waste sites. The Comprehensive Environmental Response, Compensation, and Liability Act established a program to identify sites where hazardous substances have been or might be released into the environment; to ensure that they are remediated by responsible parties or the government; to compensate the United States, states, municipalities, and tribes for damages to [natural resources](https://asc.understandingaccounting.org/glossary/n/#natural-resources "Under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, natural resources are defined as land, fish, wildlife, biota, air, water, groundwater, drinking water supplies, and other such resources belonging to, managed or held in trust by, or otherwise controlled by the United States, state or local governments, foreign governments, or Indian tribes."); and to create a procedure for claims against responsible parties by parties who have cleaned up sites or spent money to restore natural resources. ##### [410-30-05-7](https://asc.understandingaccounting.org/asc/410/30/#410-30-05-7) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:23.089Z to 2026-09-10T00:21:23.089Z Record version: sha256:0cb3c860444aa2d0c24bc05e6b5264c5eba07a3e088773906fc3d5064296e901 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Resource Conservation and Recovery Act provides comprehensive federal regulation of [hazardous wastes](https://asc.understandingaccounting.org/glossary/h/#hazardous-waste "Related to Resource Conservation and Recovery Act of 1976: a waste, or combination of wastes, that because of its quantity, concentration, toxicity, corrosiveness, mutagenicity or inflammability, or physical, chemical, or infectious characteristics may cause, or significantly contribute to, an increase in mortality or an increase in serious irreversible, or incapacitating reversible illness or pose a substantial present or potential hazard to human health or the environment when improperly treated, stored, transported, or disposed of, or otherwise managed. Technically, those wastes that are regulated under the Resource Conservation and Recovery Act of 1976 40 CFR Part 261 are considered to be hazardous wastes.") from point of generation to final [disposal](https://asc.understandingaccounting.org/glossary/d/#disposal "Related to the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 and the Resource Conservation and Recovery Act of 1976: under the Resource Conservation and Recovery Act of 1976, the discharge, deposit, injection, dumping, spilling, leaking, or placing of any solid waste or hazardous waste into or on any land or water so that such solid waste or hazardous waste or any constituent thereof may enter the environment or be emitted into the air or discharged into any waters, including groundwaters. Similarly under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 with regard to hazardous substances."). All generators of hazardous waste, transporters of hazardous waste, and owners and operators of hazardous waste treatment, storage, or disposal facilities must comply with the applicable requirements of the statute. Many states have also enacted laws that are similar to the federal statutes. Furthermore, under certain federal statutes, such as the Resource Conservation and Recovery Act of 1976, states are allowed to promulgate regulations to implement federal programs as long as the state law is at least as stringent as the federal law. In most such cases, states are free to enact more stringent provisions. #### Laws Intended to Control or Prevent Pollution ##### [410-30-05-8](https://asc.understandingaccounting.org/asc/410/30/#410-30-05-8) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:23.089Z to 2026-09-10T00:21:23.089Z Record version: sha256:1ac574ef2d311bb05fbb01aa51c61ec7a0302b5c717bd025c7aaf1a1a545b30d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Environmental laws of the second kind are intended to control or prevent pollution and are directed at identifying or regulating pollution sources or reducing emissions or discharges of pollutants. There are many statutes that regulate sources of pollution, including the pollution control provisions of the Resource Conservation and Recovery Act of 1976 (solid and hazardous wastes), the Clean Water Act (discharge of pollutants into the waters of the United States and to publicly owned treatment works), and the Clean Air Act (emission of pollutants into the atmosphere). Other examples are the Emergency Planning and Community Right-to-Know Act and the Pollution Prevention Act of 1990. ##### [410-30-05-9](https://asc.understandingaccounting.org/asc/410/30/#410-30-05-9) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:23.089Z to 2026-09-10T00:21:23.089Z Record version: sha256:11cd82c39f1a0909d6f6ff161e10bbba68d7229e9ddf227ba74f399c5e629903 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The pollution control provisions in Chapter 3 of the Resource Conservation and Recovery Act of 1976 provide for cradle-to-grave management standards for hazardous wastes. Section 7003 of the Resource Conservation and Recovery Act of 1976 also authorizes the Environmental Protection Agency to conduct [removal actions](https://asc.understandingaccounting.org/glossary/r/#removal-action "Under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, generally short-term actions taken to respond promptly to an urgent need. The cleanup or removal of released hazardous substances from the environment; actions in response to the threat of release; actions that may be necessary to monitor, assess, and evaluate the release or threat; disposal of removed material; or other actions needed to prevent, minimize, or mitigate damage to public health or welfare or to the environment. Removal also includes, without being limited to, security fencing or other measures to limit access; provision of alternative water supplies; temporary evacuation and housing of threatened individuals not otherwise provided for; and any emergency assistance provided under the Disaster Relief Act."), seek affirmative injunctive relief, and maintain cost-recovery actions where an imminent and substantial endangerment to the public health or welfare or to the environment is determined to exist. Much like under Superfund, one who has contributed to the disposal of waste that is causing an imminent and substantial endangerment can be required to perform or pay for associated remediation under section 7003. The Resource Conservation and Recovery Act of 1976 also requires the Environmental Protection Agency to regulate underground storage tanks. Most states have enacted their own underground storage tank regulations as well. ##### [410-30-05-10](https://asc.understandingaccounting.org/asc/410/30/#410-30-05-10) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:23.089Z to 2026-09-10T00:21:23.089Z Record version: sha256:bed109fd3a214d3d8a3d57e7f55abf5cb2ffbbc454a83bdd81378a980a7b6ef2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Clean Air Act provides comprehensive federal regulation of all sources of air pollution. Amendments to the Clean Air Act in the 1990s are designed to address issues such as acid rain, urban air pollution, toxic air pollutants, and ozone-depleting chemicals. The major provisions of the Clean Air Act amendments require emissions reduction in the electric utility industry, operating permits for existing facilities, an expansion of the air toxics program to regulate a large number of toxic air pollutants, and new source categories (including smaller sources, such as dry cleaners). ##### [410-30-05-11](https://asc.understandingaccounting.org/asc/410/30/#410-30-05-11) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:23.089Z to 2026-09-10T00:21:23.089Z Record version: sha256:8fa167554f4511e00dedf8f3f49e788da770a2e3dbe665e4367df1a718bcff7c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Clean Water Act provides comprehensive federal regulation of all sources of water pollution. The act authorizes cleanup, injunctive, and cost-recovery actions where an imminent hazard is caused by pollution. It also prohibits the discharge of oil and other hazardous substances to the navigable waters of the United States, imposes a criminal penalty for failure to notify the appropriate entity of such discharges, and provides for citizen suits. Most states have assumed enforcement of the Act within their borders through state regulations that correspond to the federal regulations related to the control or prevention of pollution of water. #### Other Federal Statutes ##### [410-30-05-12](https://asc.understandingaccounting.org/asc/410/30/#410-30-05-12) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:23.089Z to 2026-09-10T00:21:23.089Z Record version: sha256:fe4a6d3b50a2ffaf4a93500e53ae03ff0608b650bb550d003a46dd6425bb2aa4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. There are a variety of other statutes that relate to environmental matters. Two of the more significant statutes are the Emergency Planning and Community Right-to-Know Act and the Toxic Substances Control Act. ##### [410-30-05-13](https://asc.understandingaccounting.org/asc/410/30/#410-30-05-13) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:23.089Z to 2026-09-10T00:21:23.089Z Record version: sha256:57afd5aaee9f5307e69f165aa3b06adbe28a808f04c81e2cadcac81a16aa81d0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Emergency Planning and Community Right-to-Know Act requires facilities that have certain quantities of extremely hazardous substances to notify their state emergency response commission that they are subject to the emergency planning requirements of the Superfund Amendments and Reauthorization Act of 1986. They must also report releases to the local emergency planning committee. In addition, facilities that store chemicals over specified threshold amounts must submit material safety data sheets, or their equivalent, to the appropriate local emergency planning committee, the state emergency response commission, and the fire department with jurisdiction over the facility. ##### [410-30-05-14](https://asc.understandingaccounting.org/asc/410/30/#410-30-05-14) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:23.089Z to 2026-09-10T00:21:23.089Z Record version: sha256:29ee61785e3b775839ba22b267a1be97d2a1f0742661400a4c7f19441b8f61af Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Toxic Substances Control Act regulates the manufacture, processing, and distribution in commerce of chemical substances and mixtures capable of adversely affecting health or the environment. The Toxic Substances Control Act may require testing and may impose use restrictions, along with requirements for the reporting and retention of information on the risks of Toxic Substances Control Act- regulated substances. Regulations promulgated under the Toxic Substances Control Act also govern the manufacturing, processing, and distribution in commerce of polychlorinated biphenyls and asbestos. #### Potentially Responsible Parties ##### [410-30-05-15](https://asc.understandingaccounting.org/asc/410/30/#410-30-05-15) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:23.089Z to 2026-09-10T00:21:23.089Z Record version: sha256:dceb94ff91c6153d33791a602c8a2f3ba4212b5e99ff97f5b07288804078d8e9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Superfund places liability on the following four distinct classes of responsible parties: 1. a Current owners or operators of sites at which hazardous substances have been disposed of or abandoned 2. b Previous owners or operators of sites at the time of disposal of hazardous substances 3. c Parties that "arranged for disposal" of hazardous substances found at the sites 4. d Parties that transported hazardous substances to a site, having selected the site for treatment or disposal. ##### [410-30-05-16](https://asc.understandingaccounting.org/asc/410/30/#410-30-05-16) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:23.089Z to 2026-09-10T00:21:23.089Z Record version: sha256:ef757792a4210027fe1f70bf238a5dc9f85e9d511d712a76869ea3130bd69d4c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This liability is imposed regardless of whether a party was negligent, whether the site was in compliance with environmental laws at the time of the disposal, or whether the party participated in or benefited from the deposit of the [hazardous substance](https://asc.understandingaccounting.org/glossary/h/#hazardous-substance "Related to Superfund: the definition of hazardous substance in the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 is broader than the definition of hazardous wastes under the Resource Conservation and Recovery Act of 1976. Under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, a hazardous substance is any element, compound, mixture, solution, or substance that, when released to the environment, may present substantial danger to the public health or welfare or to the environment. It also includes the following: Specifically designated substances Toxic pollutants under the Federal Water Pollution Control Act Hazardous wastes having the characteristics identified under or listed pursuant to the Resource Conservation and Recovery Act of 1976 (excluding any waste suspended from regulation under the Solid Waste Disposal Act by Congress) Hazardous air pollutants under the Clean Air Act Any imminently hazardous chemical substance or mixture for which the government has taken action under section 7 of the Toxic Substances Control Act. Petroleum (including crude oil not otherwise specifically listed or designated as a hazardous substance under any of those laws), natural gas, natural gas liquids, liquefied natural gas, or synthetic gas useable for fuel (or mixtures of natural gas and such synthetic gas) are excluded."). Parties that disposed of hazardous substances many years ago—including the years preceding the enactment of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 —at sites where there is, was, or may be a [release](https://asc.understandingaccounting.org/glossary/r/#release "Related to Superfund: any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, or disposing into the environment. Includes the abandonment or discarding of barrels, containers, and other closed receptacles containing any hazardous substance, pollutant, or contaminant. The law provides for several exclusions. Release also means the substantial threat of release.") into the environment, may be liable for remediation costs. #### Strict Liability ##### [410-30-05-17](https://asc.understandingaccounting.org/asc/410/30/#410-30-05-17) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:23.089Z to 2026-09-10T00:21:23.089Z Record version: sha256:05298f1fc263c6c8fe4594423b6cb20e8419ad7681f99166ef80594b0416e273 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The courts have interpreted the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 to impose [strict liability](https://asc.understandingaccounting.org/glossary/s/#strict-liability "Liability imposed without regard to the liable party's fault."). Thus, a waste generator that disposed of its waste at approved facilities, in accordance with all then-current requirements, having exercised "due care," would nevertheless be liable. Further, a waste generator that is responsible for a small percentage of the total amount of waste at a site may be held liable for the entire cost of remediating the site. ##### [410-30-05-18](https://asc.understandingaccounting.org/asc/410/30/#410-30-05-18) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:23.089Z to 2026-09-10T00:21:23.089Z Record version: sha256:e8346ee2dc75b8676b2e7f6168bd9161cfaf4cf65a578be5a6c9dd4ad055ae53 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Also noteworthy is that wastes need not be hazardous wastes for there to be environmental remediation liability. If the waste generator "arranged for disposal" of wastes containing hazardous substances (at any concentration level and regardless of whether the substances were defined as, or known to be, hazardous at the time of disposal), and a "release" of hazardous substances has or could occur, the waste generator could be subject to environmental remediation liability. ##### [410-30-05-19](https://asc.understandingaccounting.org/asc/410/30/#410-30-05-19) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:23.089Z to 2026-09-10T00:21:23.089Z Record version: sha256:f78f72d13fcf3d4dde76fcaad8014989fb0b163366edfa5a59abd6336c687660 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Hazardous substance is a much broader term than hazardous waste. It includes any substance identified by the Environmental Protection Agency by regulation, pursuant to a number of federal statutes. Covered, for example, are substances considered to be toxic pollutants under the Clean Water Act or hazardous air pollutants under the Clean Air Act. The various lists of hazardous substances identified by the Environmental Protection Agency contain more than one thousand chemicals and chemical compounds. ##### [410-30-05-20](https://asc.understandingaccounting.org/asc/410/30/#410-30-05-20) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:23.089Z to 2026-09-10T00:21:23.089Z Record version: sha256:abe4af67646023c009d899129275b24b4e6961899a1f2c6d03f1fedb68d008a4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The possibility of becoming subject to liability for environmental remediation costs associated with past waste disposal practices based on strict liability can affect transactions involving the acquisition or merger of an entity or the purchase of land. #### Joint and Several Liability ##### [410-30-05-21](https://asc.understandingaccounting.org/asc/410/30/#410-30-05-21) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:23.089Z to 2026-09-10T00:21:23.089Z Record version: sha256:158a468f55c9ab360da5f2d0ac5d90571e6f17c2b09c7e20d02e9322b2b24f1e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Through Environmental Protection Agency initiated legal action, liability under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 may be [joint and several](https://asc.understandingaccounting.org/glossary/j/#joint-and-several-liability "Where liability is joint and several, any party deemed liable is potentially responsible for all of the associated costs. This scheme of liability means that any responsible party can potentially be liable for the entire cost of remediating a site, notwithstanding that the party is responsible for only a small amount of the total hazardous substances or waste at the site and did nothing improper."). If a potentially responsible party can prove, however, that the harm is divisible and there is a reasonable basis for apportionment of costs, the potentially responsible party may ultimately be responsible only for its portion of the costs. ##### [410-30-05-22](https://asc.understandingaccounting.org/asc/410/30/#410-30-05-22) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:23.089Z to 2026-09-10T00:21:23.089Z Record version: sha256:4cb822cf94a1e3bc7a0a6b49e15877d5155afd38fd6476b89f2e589294df3fbc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In order to mitigate the potentially harsh effects of the strict, joint and several, and retroactive liability scheme, however, Superfund does permit responsible parties to sue other responsible parties to make them contribute to the cost of the remediation or to recover money spent on remediation. #### Costs Associated with Remediation ##### [410-30-05-23](https://asc.understandingaccounting.org/asc/410/30/#410-30-05-23) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:23.089Z to 2026-09-10T00:21:23.089Z Record version: sha256:b7e9ee37dbb125bd54aaafc4cf90af321accf167aafab17df2afd84399e5acff Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Costs to a potentially responsible party may include cleanup costs (containment, removal, [remedial action](https://asc.understandingaccounting.org/glossary/r/#remedial-action "Related to Superfund: generally long-term actions taken to do any of the following: Investigate, alleviate, or eliminate the effects of a release of a hazardous substance into the environment Investigate, alleviate, or eliminate a threat of the release of an existing hazardous substance that could potentially harm human health or the environment Restore natural resources. Also refers to corrective action under the Resource Conservation and Recovery Act of 1976.")), enforcement costs (for example, legal), government oversight costs, and natural resource damages. Though the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 does not provide for personal injury or property damage suits, suits for injury to health or property (referred to as toxic torts) may also be brought by third parties under various legal theories. There is a growing specter of liability for natural resource damages under the Superfund laws. The Comprehensive Environmental Response, Compensation, and Liability Act of 1980 authorizes the recovery of damages for injury to, destruction of, or loss of natural resources, including reasonable costs for assessing such injury resulting from a release of a hazardous substance. Natural resource damage claims include actual restoration costs and lost use values and may in the future include nonuse values, such as the intrinsic public value of protecting or restoring resources that may not be used but are valuable for their mere existence. ##### [410-30-05-24](https://asc.understandingaccounting.org/asc/410/30/#410-30-05-24) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:23.089Z to 2026-09-10T00:21:23.089Z Record version: sha256:8a17dd9f97cbfaf5a488931e3c8d781e122580c76d017cfe9291f04c672b6c0a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Additional costs can include a remedial investigation and a feasibility study that together generally take a minimum of two years to complete and, depending on factors such as the types of hazardous substances, soil formations, and number of parties involved, may take more than five years. The Environmental Protection Agency oversees the progress of the remedial investigation and feasibility study, and completion is sometimes performed in stages. After Superfund site remedial action is completed, activities must be conducted at the site to ensure that the remedy is effective and operating properly. For example, after a system to pump and treat groundwater is constructed (remedial action), the system must be operated and maintained. In addition, the Environmental Protection Agency may require postremediation monitoring. These operation and maintenance activities may continue for 30 years or longer. #### Environmental Loss Contingencies ##### [410-30-05-25](https://asc.understandingaccounting.org/asc/410/30/#410-30-05-25) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:23.089Z to 2026-09-10T00:21:23.089Z Record version: sha256:4037a063de2affc640419c1397058c9eb1f2da645d46a38f783b65cdb6a290ee Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Although environmental remediation liabilities is not one of the examples discussed in paragraph [450-20-05-10](https://asc.understandingaccounting.org/asc/450/20/#450-20-05-10), environmental remediation liabilities are loss contingencies, and the discussion in paragraphs [450-20-55-10 through 55-17](https://asc.understandingaccounting.org/asc/450/20/#450-20-55-10) can be useful in understanding the requirements of Subtopic 450-20 as they relate to environmental remediation liabilities. Source downloaded (UTC): 2026-09-10T00:21:25.642Z to 2026-09-10T00:21:25.642Z Record version: sha256:d24e1ed219ca6db7617c84e2c7c54a7f72fe6ab996dd65d0b987ab7b81331c26 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 410-30-10: 10 Objectives [Read section](https://asc.understandingaccounting.org/asc/410/30/#10-objectives) SEC content: no ##### [410-30-10-1](https://asc.understandingaccounting.org/asc/410/30/#410-30-10-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:25.642Z to 2026-09-10T00:21:25.642Z Record version: sha256:724590d13bc6c3fbeda2bace76a1db8834f51b00edf73d496be407b2ed7b85f0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic requires that an entity recognize a liability for obligations associated with environmental remediation liabilities that relate to pollution arising from some past act, generally as a result of the provisions of Superfund, the corrective-action provisions of the Resource Conservation and Recovery Act, or analogous state and non-U.S. laws and regulations. Source downloaded (UTC): 2026-09-10T00:21:27.455Z to 2026-09-10T00:21:27.455Z Record version: sha256:e8e6b834ba6829e46f9d74af9e257c0ab645ba6ce844966ddf4f88f27e9042e0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 410-30-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/410/30/#15-scope-and-scope-exceptions) SEC content: no #### Entities ##### [410-30-15-1](https://asc.understandingaccounting.org/asc/410/30/#410-30-15-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:27.455Z to 2026-09-10T00:21:27.455Z Record version: sha256:45aba4f925daac6fcd2f7db4ad68e3a1a632f63b6acb7552ae95d3a71bcc6b5b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The provisions of this Subtopic apply to all entities. This Subtopic provides guidance on accounting for environmental remediation liabilities and is written in the context of operations taking place in the United States; however, the accounting guidance is applicable to all the operations of the reporting entity. ##### [410-30-15-2](https://asc.understandingaccounting.org/asc/410/30/#410-30-15-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:27.455Z to 2026-09-10T00:21:27.455Z Record version: sha256:7ef5f2b98ae3a0527c74205b4cce07157c86514cb50b00b7b76f7f55b7c56f49 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The recognition and measurement guidance in this Subtopic should be applied on a site-by-site basis. #### Transactions ##### [410-30-15-3](https://asc.understandingaccounting.org/asc/410/30/#410-30-15-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:27.455Z to 2026-09-10T00:21:27.455Z Record version: sha256:f8e8c6bfd27c048e37cb1e327ad0f289f24bded37bc45ec44c9c37dac2f45db0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in this Subtopic does not apply to the following transactions and activities: 1. a Environmental contamination incurred in the normal operation of a long-lived asset (see Subtopic 410-20 for guidance that will apply if the entity is legally obligated to treat the contamination). Paragraph [410-20-15-3(b)](https://asc.understandingaccounting.org/asc/410/20/#410-20-15-3) explains that the obligation to clean up the spillage resulting from the normal operation of the fuel storage facility is within the scope of Subtopic 410-20. Additionally, that Subtopic applies if a [legal obligation](https://asc.understandingaccounting.org/glossary/l/#legal-obligation "An obligation that a party is required to settle as a result of an existing or enacted law, statute, ordinance, or written or oral contract or by legal construction of a contract under the doctrine of promissory estoppel.") to treat environmental contamination is incurred or assumed as a result of the acquisition, construction, or development of a long-lived asset. 2. b Pollution control costs with respect to current operations or on accounting for costs of future site restoration or [closure](https://asc.understandingaccounting.org/glossary/c/#closure "Related to the Resource Conservation and Recovery Act of 1976: the process in which the owner-operator of a hazardous waste management unit discontinues active operation of the unit by treating, removing from the site, or disposing of on site all hazardous wastes in accordance with an Environmental Protection Agency or state-approved plan. Included, for example, are the process of emptying, cleaning, and removing or filling underground storage tanks and the capping of a landfill. Closure entails specific financial guarantees and technical tasks that are included in a closure plan and must be implemented.") that are required upon the cessation of operations or sale of facilities, as such current and future costs and obligations represent a class of accounting issues different from environmental remediation liabilities. 3. c Environmental remediation actions that are undertaken at the sole discretion of management and that are not induced by the threat, by governments or other parties, of litigation or of assertion of a claim or an assessment. 4. d Recognizing liabilities of insurance entities for unpaid claims. 5. e Natural resource damages and toxic torts (see paragraphs [450-20-55-10 through 55-21](https://asc.understandingaccounting.org/asc/450/20/#450-20-55-10) ). 6. f Asset impairment issues. Source downloaded (UTC): 2026-09-10T00:21:33.044Z to 2026-09-10T00:21:33.044Z Record version: sha256:6c8c8adb4c85441883a193e08c0cf2e97ae043884771a927dbbfcae148b17a44 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 410-30-25: 25 Recognition [Read section](https://asc.understandingaccounting.org/asc/410/30/#25-recognition) SEC content: no #### Overall Approach ##### [410-30-25-1](https://asc.understandingaccounting.org/asc/410/30/#410-30-25-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:33.044Z to 2026-09-10T00:21:33.044Z Record version: sha256:084aab5449bea130aad9b7df2e0f47799102edb6ea2d5bafac11c8c135ea29c3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [450-20-25-2](https://asc.understandingaccounting.org/asc/450/20/#450-20-25-2) requires the accrual of a liability if both of the following conditions are met: 1. a Information available before the financial statements are issued or are available to be issued (as discussed in Section 855-10-25) indicates that it is probable that an asset has been impaired or a liability has been incurred at the date of the financial statements. 2. b The amount of the loss can be reasonably estimated. ##### [410-30-25-2](https://asc.understandingaccounting.org/asc/410/30/#410-30-25-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:33.044Z to 2026-09-10T00:21:33.044Z Record version: sha256:6faf488d076e49b0105189bd4ec8e8c53c72e0ac6df154331fb3e9a4aef2803f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity's environmental remediation obligation that results in a liability generally does not become determinable as a distinct event, nor is the amount of the liability generally fixed and determinable at a specific point in time. Rather, the existence of a liability for environmental remediation costs becomes determinable and the amount of the liability becomes estimable over a continuum of events and activities that help to frame, define, and verify the liability. (See Subtopic 450-20.) ##### [410-30-25-3](https://asc.understandingaccounting.org/asc/410/30/#410-30-25-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:33.044Z to 2026-09-10T00:21:33.044Z Record version: sha256:60d55e207916e7eb8f739f6592ee22eb6794fe8818b750bc0dd7a43badd92f51 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The underlying cause of an environmental remediation liability is the past or present ownership or operation of a site, or the contribution or transportation of waste to a site, at which [remedial actions](https://asc.understandingaccounting.org/glossary/r/#remedial-action "Related to Superfund: generally long-term actions taken to do any of the following: Investigate, alleviate, or eliminate the effects of a release of a hazardous substance into the environment Investigate, alleviate, or eliminate a threat of the release of an existing hazardous substance that could potentially harm human health or the environment Restore natural resources. Also refers to corrective action under the Resource Conservation and Recovery Act of 1976.") (at a minimum, investigation) must take place. For a liability to be recognized in the financial statements, this underlying cause must have occurred on or before the date of the financial statements. #### Probability That a Liability Has Been Incurred ##### [410-30-25-4](https://asc.understandingaccounting.org/asc/410/30/#410-30-25-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:33.044Z to 2026-09-10T00:21:33.044Z Record version: sha256:602932208c55c100e4e6fcadf8251a9fbcb0ec833430d985919bc1575826b247 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In the context of environmental remediation liabilities, the probability criterion in paragraph [450-20-25-2](https://asc.understandingaccounting.org/asc/450/20/#450-20-25-2) consists of two elements; the criterion is met if both of the following elements are met on or before the date the financial statements are issued or are available to be issued (as discussed in Section 855-10-25): 1. a Litigation has commenced or a claim or an assessment has been asserted, or, based on available information, commencement of litigation or assertion of a claim or an assessment is probable. In other words, it has been asserted (or it is probable that it will be asserted) that the entity is responsible for participating in a remediation process because of a past event. 2. b Based on available information, it is probable that the outcome of such litigation, claim, or assessment will be unfavorable. In other words, an entity will be held responsible for participating in a remediation process because of the past event. ##### [410-30-25-5](https://asc.understandingaccounting.org/asc/410/30/#410-30-25-5) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:33.044Z to 2026-09-10T00:21:33.044Z Record version: sha256:bb8f0b7a4b59a4eeb1fa685a6d03c21ab63d42c895d8ba53e82c0446b74db17c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. What constitutes commencement or probable commencement of litigation or assertion or probable assertion of a claim or an assessment in relation to particular environmental laws and regulations may require legal determination. ##### [410-30-25-6](https://asc.understandingaccounting.org/asc/410/30/#410-30-25-6) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:33.044Z to 2026-09-10T00:21:33.044Z Record version: sha256:dbd2d7cebeb97e1fa7e5f4c430f2df9758639988fa992394b41a76e0d3cdcda8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Given the legal framework within which most environmental remediation liabilities arise, there is a presumption that the outcome of such litigation, claim, or assessment will be unfavorable if both of the following conditions exist: 1. a Litigation has commenced or a claim or an assessment has been asserted, or commencement of litigation or assertion of a claim or assessment is probable. 2. b The reporting entity is associated with the site—that is, it in fact arranged for the [disposal](https://asc.understandingaccounting.org/glossary/d/#disposal "Related to the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 and the Resource Conservation and Recovery Act of 1976: under the Resource Conservation and Recovery Act of 1976, the discharge, deposit, injection, dumping, spilling, leaking, or placing of any solid waste or hazardous waste into or on any land or water so that such solid waste or hazardous waste or any constituent thereof may enter the environment or be emitted into the air or discharged into any waters, including groundwaters. Similarly under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 with regard to hazardous substances.") of hazardous substances found at a site or transported hazardous substances to the site or is the current or previous owner or operator of the site. #### Ability to Reasonably Estimate the Liability ##### [410-30-25-7](https://asc.understandingaccounting.org/asc/410/30/#410-30-25-7) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:33.044Z to 2026-09-10T00:21:33.044Z Record version: sha256:3844287dc0f4745be7d0d0716eb966a6b6899519f78f0362843c2dd14a4f6134 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Estimating environmental remediation liabilities involves an array of issues at any point in time. In the early stages of the process, cost estimates can be difficult to derive because of uncertainties about a variety of factors. For this reason, estimates developed in the early stages of remediation can vary significantly; in many cases, early estimates later require significant revision. The following are some of the factors that are integral to developing cost estimates: 1. a The extent and types of hazardous substances at a site 2. b The range of technologies that can be used for remediation 3. c Evolving standards of what constitutes acceptable remediation 4. d The number and financial condition of other potentially responsible parties and the extent of their responsibility for the remediation (that is, the extent and types of hazardous substances they contributed to the site). ##### [410-30-25-8](https://asc.understandingaccounting.org/asc/410/30/#410-30-25-8) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:33.044Z to 2026-09-10T00:21:33.044Z Record version: sha256:da5d34de698e83621f9350b1491b8be328f82d12cbf1d7f50e7d307758914c88 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Section 450-20-55 concludes that the criterion for recognition of a loss contingency in paragraph [450-20-25-2(b)](https://asc.understandingaccounting.org/asc/450/20/#450-20-25-2) is met when a range of loss can be reasonably estimated. ##### [410-30-25-9](https://asc.understandingaccounting.org/asc/410/30/#410-30-25-9) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:33.044Z to 2026-09-10T00:21:33.044Z Record version: sha256:2a69d1b29cd72031776db1f1e446f5e313be730307431cb66c9b36ec77281d46 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An estimate of the range of an environmental remediation liability typically is derived by combining estimates of various components of the liability (such as the costs of performing particular tasks, or amounts allocable to other potentially responsible parties but that will not be paid by those other potentially responsible parties), which are themselves likely to be ranges. For some of those component ranges, there may be amounts that appear to be better estimates than any other amount within the range; for other component ranges, there may be no such best estimates. Accordingly, the overall liability that is recorded may be based on amounts representing the lower end of a range of costs for some components of the liability and best estimates within ranges of costs of other components of the liability. ##### [410-30-25-10](https://asc.understandingaccounting.org/asc/410/30/#410-30-25-10) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:33.044Z to 2026-09-10T00:21:33.044Z Record version: sha256:caafe017b6bd16f24dfbbe9d85c4a0f2801a03760aab9f50ce45eed40560b2bc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. At the early stages of the remediation process, particular components of the overall liability may not be reasonably estimable. This fact should not preclude the recognition of a liability. Rather, the components of the liability that can be reasonably estimated should be viewed as a surrogate for the minimum in the range of the overall liability. ##### [410-30-25-11](https://asc.understandingaccounting.org/asc/410/30/#410-30-25-11) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:33.044Z to 2026-09-10T00:21:33.044Z Record version: sha256:86e8e21f79cb60810be7c1c918c07227dec762365b9740defff27e9806f54b7f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For example, a sole potentially responsible party that has confirmed that it sent waste to a Superfund site and agrees to perform a remedial investigation and feasibility study may know that it will incur costs related to the [remedial investigation-feasibility study](https://asc.understandingaccounting.org/glossary/r/#remedial-investigation-feasibility-study "Extensive technical studies conducted by the government or by the potentially responsible parties to investigate the scope of site impacts and determine the remedial alternatives that, consistent with the National Contingency Plan, may be implemented at a Superfund site. Government-funded remedial investigation-feasibility studies do not recommend a specific alternative for implementation. Remedial investigation-feasibility studies conducted by potentially responsible parties usually do recommend and technically support a remedial alternative. A remedial investigation-feasibility study may include a variety of on- and off-site activities, such as monitoring, sampling, and analysis."). The potentially responsible party, although aware that the total costs associated with the site will be greater than the cost of the remedial investigation-feasibility study, may be unable to reasonably estimate the overall liability because of existing uncertainties, for example, regarding the kinds and quantities of hazardous substances present at the site and the technologies available to remediate the site. This lack of ability to quantify the total costs of the remediation effort, however, shall not preclude recognition of the estimated cost of the remedial investigation-feasibility study. In this circumstance, a liability for the best estimate (or, if no best estimate is available, the minimum amount in the range) of the cost of the remedial investigation-feasibility study and for any other component remediation costs that can be reasonably estimated shall be recognized in the entity's financial statements. ##### [410-30-25-12](https://asc.understandingaccounting.org/asc/410/30/#410-30-25-12) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:33.044Z to 2026-09-10T00:21:33.044Z Record version: sha256:2c421f71487dcf1f9e2d57ac3440f76aeee606c8ea5f86c41555070fb2861167 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Uncertainties relating to the entity's share of an environmental remediation liability shall not preclude the entity from recognizing its best estimate of its share of the liability or, if no best estimate can be made, the minimum estimate of its share of the liability, if the liability is probable and the total remediation liability associated with the site is reasonably estimable within a range (see paragraphs [410-30-30-1 through 30-7](https://asc.understandingaccounting.org/asc/410/30/#410-30-30-1) ). ##### [410-30-25-13](https://asc.understandingaccounting.org/asc/410/30/#410-30-25-13) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:33.044Z to 2026-09-10T00:21:33.044Z Record version: sha256:7fb57355be1ccc789f593b962a30f48d04fbe1f94b74ec023331c83e58dbeb3d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Uncertainties are pervasive in the measurement of environmental remediation liabilities, and reporting entities are required to recognize their best estimate at the particular point in time (or, if no best estimate can be made, the minimum estimate) of their share of the liability and to refine their estimate as events in the remediation process occur. #### Benchmarks ##### [410-30-25-14](https://asc.understandingaccounting.org/asc/410/30/#410-30-25-14) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:33.044Z to 2026-09-10T00:21:33.044Z Record version: sha256:fe3337e533e5cb73366de90e5ff4f2fab991b845461ab26f0a08c317e5d06f42 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Certain stages of a remediation effort or process and of potentially responsible party involvement (see paragraph [410-30-05-24](https://asc.understandingaccounting.org/asc/410/30/#410-30-05-24) for a discussion of these stages) provide benchmarks that should be considered when evaluating the probability that a loss has been incurred and the extent to which any loss is reasonably estimable. Benchmarks should not, however, be applied in a manner that would delay recognition beyond the point at which the recognition criteria in Subtopic 450-20 are met. ##### [410-30-25-15](https://asc.understandingaccounting.org/asc/410/30/#410-30-25-15) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:33.044Z to 2026-09-10T00:21:33.044Z Record version: sha256:b2e3638b503e7f0ced70e335c01c2a46c71165984185474760c2196717b74141 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following are recognition benchmarks for a Superfund remediation liability; analogous stages of the Resource Conservation and Recovery Act corrective-action process are also indicated. At a minimum, the estimate of a Superfund (or Resource Conservation and Recovery Act) remediation liability should be evaluated as each of these benchmarks occurs. 1. a Identification and verification of an entity as a potentially responsible party. The Resource Conservation and Recovery Act analogue is subjection to facility permit requirements. Receipt of notification or otherwise becoming aware that an entity may be a potentially responsible party compels the entity to action. The entity must examine its records to determine whether it is associated with the site. If, based on a review and evaluation of its records and all other available information, the entity determines that it is associated with the site, it is probable that a liability has been incurred. If all or a portion of the liability is reasonably estimable, the liability shall be recognized. In some cases, an entity will be able to reasonably estimate a range of its liability very early in the process because the site situation is common or similar to situations at other sites with which the entity has been associated (for example, the remediation involves only the removal of underground storage tanks in accordance with the underground storage tank program). In such cases, the criteria for recognition would be met and the liability shall be recognized. In other cases, however, the entity may have insufficient information to reasonably estimate the minimum amount in the range of its liability. In these cases, the criteria for recognition would not be met at this time. 2. b Receipt of [unilateral administrative order](https://asc.understandingaccounting.org/glossary/u/#unilateral-administrative-order "Order issued unilaterally by the Environmental Protection Agency under section 106(a) of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 to potentially responsible parties, or to nonpotentially responsible parties such as adjacent landowners, requiring them to take a response action. Unilateral administrative orders contain findings of fact and conclusions of law, and they specify the work to be performed and the Environmental Protection Agency's right to take over the work in the event of noncompliance, inadequate performance, or an emergency. A unilateral administrative order does not allocate conduct required by the order between individual potentially responsible parties; however, the Environmental Protection Agency may issue carve-out orders requiring individual potentially responsible parties to perform specific actions. Also referred to as a section 106 order."). The Resource Conservation and Recovery Act analogue is, generally, interim corrective measures. An entity may receive a unilateral administrative order compelling it to take a response action at a site or risk penalties of up to four times the cost of the response action. Such response actions may be relatively limited actions, such as the performance of a remedial investigation and feasibility study or performance of a [removal action](https://asc.understandingaccounting.org/glossary/r/#removal-action "Under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, generally short-term actions taken to respond promptly to an urgent need. The cleanup or removal of released hazardous substances from the environment; actions in response to the threat of release; actions that may be necessary to monitor, assess, and evaluate the release or threat; disposal of removed material; or other actions needed to prevent, minimize, or mitigate damage to public health or welfare or to the environment. Removal also includes, without being limited to, security fencing or other measures to limit access; provision of alternative water supplies; temporary evacuation and housing of threatened individuals not otherwise provided for; and any emergency assistance provided under the Disaster Relief Act."), or they may be broad actions such as remediating a site. Under section 106 of Superfund, the Environmental Protection Agency must find that an "imminent and substantial endangerment" exists at the site before such an order may be issued. No preenforcement review by a court is authorized under Superfund if an entity elects to challenge a unilateral administrative order. The ability to estimate costs resulting from unilateral administrative orders varies with factors such as site complexity and the nature and extent of the work to be performed. The benchmarks that follow should be considered in evaluating the ability to estimate such costs insofar as the actions required by the unilateral administrative order involve these benchmarks. The cost of performing the requisite work generally is estimable within a range, and recognition of an environmental remediation liability for costs of removal actions generally should not be delayed beyond this point. 3. c Participation, as a potentially responsible party, in the remedial investigation-feasibility study. The Resource Conservation and Recovery Act analogue is Resource Conservation and Recovery Act facility investigation. At this stage, the entity and possibly others have been identified as potentially responsible parties and have agreed to pay the costs of a study that will investigate the extent of the environmental impact of the [release](https://asc.understandingaccounting.org/glossary/r/#release "Related to Superfund: any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, or disposing into the environment. Includes the abandonment or discarding of barrels, containers, and other closed receptacles containing any hazardous substance, pollutant, or contaminant. The law provides for several exclusions. Release also means the substantial threat of release.") or threatened release of hazardous substances and identify site-remediation alternatives. Further, the total cost of the remedial investigation-feasibility study generally is estimable within a reasonable range. In addition, the identification of other potentially responsible parties and their agreement to participate in funding the remedial investigation-feasibility study typically provides a reasonable basis for determining the entity's allocable share of the cost of the remedial investigation-feasibility study. At this stage, additional information may be available regarding the extent of environmental impact and possible remediation alternatives. This additional information, however, may or may not be sufficient to provide a basis for reasonable estimation of the total remediation liability. At a minimum, the entity should recognize its share of the estimated total cost of the remedial investigation-feasibility study. As the remedial investigation-feasibility study proceeds, the entity's estimate of its share of the total cost of the remedial investigation-feasibility study can be refined. Further, additional information may become available based on which the entity can refine its estimates of other components of the liability or begin to estimate other components. For example, an entity may be able to estimate the extent of environmental impact at a site and to identify existing alternative remediation technologies. An entity may also be able to identify better the extent of its involvement at the site relative to other potentially responsible parties; the universe of potentially responsible parties may be identified; negotiations among potentially responsible parties and with federal and state Environmental Protection Agency representatives may occur; and information may be obtained that materially affects the agreed-upon method of remediation. 4. d Completion of feasibility study. The Resource Conservation and Recovery Act analogue is corrective measures study. At substantial completion of the feasibility study, both a minimum remediation liability and the entity's allocated share generally will be reasonably estimable. The feasibility study should be considered substantially complete no later than the point at which the potentially responsible parties recommend a proposed course of action to the Environmental Protection Agency. If the entity had not previously concluded that it could reasonably estimate the remediation liability (the best estimate or, if no amount within an estimated range of loss was a better estimate than any other amount in the range, the minimum amount in the range), recognition should not be delayed beyond this point, even if uncertainties, for example, about allocations to individual potentially responsible parties and potential recoveries from third parties, remain. 5. e Issuance of record of decision. The Resource Conservation and Recovery Act analogue is approval of corrective measures study. At this point, the Environmental Protection Agency has issued its determination specifying a preferred remedy. Normally, the entity and other potentially responsible parties have begun, or perhaps completed, negotiations, litigation (see paragraphs [410-30-35-8 through 35-11](https://asc.understandingaccounting.org/asc/410/30/#410-30-35-8) ), or both for their allocated share of the remediation liability. Accordingly, the entity's estimate normally can be refined based on the specified preferred remedy and a preliminary allocation of the total remediation costs. 6. f Remedial design through operation and maintenance, including postremediation monitoring. The Resource Conservation and Recovery Act analogue is corrective measures implementation. During the design phase of the remediation, engineers develop a better sense of the work to be done and are able to provide more precise estimates of the total remediation cost. Further information likely will become available at various points until the site is delisted, subject only to postremediation monitoring. The entity should continue to refine and recognize its best estimate of its final obligation as this additional information becomes available. #### Criteria to Capitalize Environmental Treatment Costs ##### [410-30-25-16](https://asc.understandingaccounting.org/asc/410/30/#410-30-25-16) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:33.044Z to 2026-09-10T00:21:33.044Z Record version: sha256:8731ac1f972ba1b809d6e70d648d67a8cde59e1ce900d9dbaf556d6da705f10d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In general, environmental contamination treatment costs shall be charged to expense. ##### [410-30-25-17](https://asc.understandingaccounting.org/asc/410/30/#410-30-25-17) Pending content: yes Source downloaded (UTC): 2026-09-10T00:21:33.044Z to 2026-09-10T00:21:33.044Z Record version: sha256:88cdfdff509f24cafbc461183e446ed3b0aa6328d695cd8c8309b7cdf8fe850e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In certain situations, such as those described in paragraphs [410-30-25-18 through 25-21](https://asc.understandingaccounting.org/asc/410/30/#410-30-25-18) ), it may be appropriate to capitalize environmental remediation costs. Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance: [105-10-65-10](https://asc.understandingaccounting.org/asc/105/10/#105-10-65-10)In certain situations, such as those described in paragraphs[410-30-25-18 through 25-19](https://asc.understandingaccounting.org/asc/410/30/#410-30-25-18) , it may be appropriate to capitalize environmental remediation costs. ##### [410-30-25-18](https://asc.understandingaccounting.org/asc/410/30/#410-30-25-18) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:33.044Z to 2026-09-10T00:21:33.044Z Record version: sha256:6dca6bfa8515afc7709aa20fc4245887ebc07894304f00b9d20329678a7fa4ce Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Those costs may be capitalized if recoverable but only if any one of the following criteria is met: 1. a The costs extend the life, increase the capacity, or improve the safety or efficiency of property owned by the entity. For purposes of this criterion, the condition of that property after the costs are incurred must be improved as compared with the condition of that property when originally constructed or acquired, if later. 2. b The costs mitigate or prevent environmental contamination that has yet to occur and that otherwise may result from future operations or activities. In addition, the costs improve the property compared with its condition when constructed or acquired, if later. 3. c The costs are incurred in preparing for sale that property currently held for sale. ##### [410-30-25-19](https://asc.understandingaccounting.org/asc/410/30/#410-30-25-19) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:33.044Z to 2026-09-10T00:21:33.044Z Record version: sha256:562c0203e5cc2cf3150b422389dee1bfba61f794762168be6039d6daead08222 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic requires that tangible assets acquired to clean a particular spill not be charged to expense immediately. Rather, to the extent that those tangible assets have future uses, they may be capitalized. Example 5 (see paragraph [410-30-55-18](https://asc.understandingaccounting.org/asc/410/30/#410-30-55-18)) illustrates this guidance. ##### [410-30-25-20](https://asc.understandingaccounting.org/asc/410/30/#410-30-25-20) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:33.044Z to 2026-09-10T00:21:33.044Z Record version: sha256:3e1f8aa56bd73c9a8dfb929c2c4f7989be256b8023e981c4349331b8469dc771 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph not used](https://asc.understandingaccounting.org/updates/page-1833002/). #### Remediation Liabilities in Property Acquisitions ##### [410-30-25-21](https://asc.understandingaccounting.org/asc/410/30/#410-30-25-21) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:33.044Z to 2026-09-10T00:21:33.044Z Record version: sha256:839aaa0728722bb8b4c58f721ac7f5cc959ff7b071e287c0388aaa40887d6cad Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The recording of the receipt of property as a contribution received following the guidance in Subtopic 958-605 shall include the effect of any environmental remediation liability that is recorded in conjunction with the contribution. ##### [410-30-25-22](https://asc.understandingaccounting.org/asc/410/30/#410-30-25-22) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:33.044Z to 2026-09-10T00:21:33.044Z Record version: sha256:604c54d7faec96d3d81920e9833401ea69f8854992a388154cd979a554be2fb1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Recording an environmental remediation liability usually results in a corresponding charge to income, and the guidance herein with respect to the income statement refers to such charges. #### Unasserted Claims ##### [410-30-25-23](https://asc.understandingaccounting.org/asc/410/30/#410-30-25-23) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:33.044Z to 2026-09-10T00:21:33.044Z Record version: sha256:3a62402c4dd73cc8da15cee8b06dbe875a9c6a0b80137e065bea1a72354dfc73 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Future actions of an entity, when they occur, may create a [legal obligation](https://asc.understandingaccounting.org/glossary/l/#legal-obligation "An obligation that a party is required to settle as a result of an existing or enacted law, statute, ordinance, or written or oral contract or by legal construction of a contract under the doctrine of promissory estoppel.") to perform environmental remediation; however, no obligation exists currently (for example, if the obligation arises only when and if an entity ceases to operate a facility). Costs related to asset [retirement](https://asc.understandingaccounting.org/glossary/r/#retirement "The other-than-temporary removal of a long-lived asset from service. That term encompasses sale, abandonment, recycling, or disposal in some other manner. However, it does not encompass the temporary idling of a long-lived asset. After an entity retires an asset, that asset is no longer under the control of that entity, no longer in existence, or no longer capable of being used in the manner for which the asset was originally acquired, constructed, or developed."), including costs of future site restoration or [closure](https://asc.understandingaccounting.org/glossary/c/#closure "Related to the Resource Conservation and Recovery Act of 1976: the process in which the owner-operator of a hazardous waste management unit discontinues active operation of the unit by treating, removing from the site, or disposing of on site all hazardous wastes in accordance with an Environmental Protection Agency or state-approved plan. Included, for example, are the process of emptying, cleaning, and removing or filling underground storage tanks and the capping of a landfill. Closure entails specific financial guarantees and technical tasks that are included in a closure plan and must be implemented.") that are required upon the cessation of operations or sale of facilities, may create a current obligation that would be recognized in accordance with Subtopic 410-20. Source downloaded (UTC): 2026-09-10T00:21:36.393Z to 2026-09-10T00:21:36.393Z Record version: sha256:d81de75cbd1c1133bdefe94154e2a07cdca3df8ea12c917866dd5293deee46d6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 410-30-30: 30 Initial Measurement [Read section](https://asc.understandingaccounting.org/asc/410/30/#30-initial-measurement) SEC content: no #### Allocation of Liability Among Potentially Responsible Parties ##### [410-30-30-1](https://asc.understandingaccounting.org/asc/410/30/#410-30-30-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:36.393Z to 2026-09-10T00:21:36.393Z Record version: sha256:4f89c7634011de65ebd5f722fd6a5e55a048bed1164f386636f6d0a8e7268c62 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. At the early stages of the remediation process, environmental remediation liabilities are not easily quantified, due in part to their uncertainties. As a practical matter, the range of an estimated remediation liability will be defined and refined as events in the remediation process occur. The environmental remediation liability recorded by an entity should be based on that entity's estimate of its allocable share of the joint and several remediation liability. The estimation of an entity's allocable share of the joint and several remediation liability (see paragraph [410-30-55-4](https://asc.understandingaccounting.org/asc/410/30/#410-30-55-4)) for a site requires an entity to do all of the following: 1. a Identify the [potentially responsible parties](https://asc.understandingaccounting.org/glossary/p/#potentially-responsible-party "Any individual, legal entity, or government—including owners, operators, transporters, or generators—potentially responsible for, or contributing to, the environmental impacts at a Superfund site. The Environmental Protection Agency has the authority to require potentially responsible parties, through administrative and legal actions, to remediate such sites. At early stages of the remediation process, the list of potentially responsible parties may be limited to a handful of entities that either were significant contributors of waste to the site or were easy to identify, for example, because of their proximity to the site or because of labeled material found at the site. As further investigation of the site occurs and as remediation activities take place, additional potentially responsible parties may be identified. Once identified, the additional potentially responsible parties would be reclassified from this category to either the participating potentially responsible party or recalcitrant potentially responsible party category. The total number of parties in this category and their aggregate allocable share of the remediation liability varies by site and cannot be reliably determined before the specific identification of individual potentially responsible parties. For example, some ultimately may be dropped from the potentially responsible party list because no substantive evidence is found to link them to the site. For others, substantive evidence eventually may be found that points to their liability. The presentation of that evidence to the entity would result in a reclassification of the party from this category of potentially responsible parties (sometimes referred to as hiding in the weeds) to either the participating potentially responsible party or recalcitrant potentially responsible party category.") for the site 2. b Assess the likelihood that other potentially responsible parties will pay their full allocable share of the joint and several remediation liability 3. c Determine the percentage of the liability that will be allocated to the entity. ##### [410-30-30-2](https://asc.understandingaccounting.org/asc/410/30/#410-30-30-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:36.393Z to 2026-09-10T00:21:36.393Z Record version: sha256:4e6ba1929d92a11a4718b5f2d289268d169507a60881b9dc6b8498e19679fe1e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For purposes of estimating an entity's allocable share of the joint and several remediation liability for a site, those parties that are potentially responsible for paying the remediation liability belong to one of the following five potentially responsible party categories: 1. a [Participating potentially responsible parties](https://asc.understandingaccounting.org/glossary/p/#participating-potentially-responsible-party "A party to a Superfund site that has acknowledged potential involvement with respect to the site. Active potentially responsible parties may participate in the various administrative, negotiation, monitoring, and remediation activities related to the site. Others may adopt a passive stance and simply monitor the activities and decisions of the more involved potentially responsible parties. This passive stance could result from a variety of factors such as the entity's lack of experience, limited internal resources, or relative involvement at a site. This category of potentially responsible parties (both active and passive) is also referred to as players.") 2. b [Recalcitrant potentially responsible parties](https://asc.understandingaccounting.org/glossary/r/#recalcitrant-potentially-responsible-party "A party whose liability with respect to a Superfund site is substantiated by evidence, but that refuses to acknowledge potential involvement with respect to the site. Recalcitrant potentially responsible parties adopt a recalcitrant attitude toward the entire remediation effort even though evidence exists that points to their involvement at a site. Some may adopt this attitude out of ignorance of the law; others may do so in the hope that they will be considered a nuisance and therefore ignored. Typically, parties in this category must be sued in order to collect their allocable share of the remediation liability; however, it may be that it is not economical to bring such suits because the parties' assets are limited. This category of potentially responsible parties is also referred to as nonparticipating potentially responsible parties.") 3. c [Unproven potentially responsible parties](https://asc.understandingaccounting.org/glossary/u/#unproven-potentially-responsible-party "A party that has been identified as a potentially responsible party for a Superfund site by the U.S. Environmental Protection Agency or by an analogous state agency, but that does not acknowledge potential involvement with respect to the site because no evidence has been presented linking the party to the site. Also referred to as a hiding-in-the-weeds potentially responsible party.") 4. d [Unknown potentially responsible parties](https://asc.understandingaccounting.org/glossary/u/#unknown-potentially-responsible-party "A party that has liability with respect to a Superfund site, but that has not yet been identified as a potentially responsible party by the Environmental Protection Agency or by an analogous state agency.") 5. e [Orphan share potentially responsible parties](https://asc.understandingaccounting.org/glossary/o/#orphan-share-potentially-responsible-party "An identified potentially responsible party that cannot be located or that is insolvent. Some of these parties may be identified by the Environmental Protection Agency; others may be identified as the site is investigated or as the remediation is performed. However, no contributions will ever be made by these parties."). ##### [410-30-30-3](https://asc.understandingaccounting.org/asc/410/30/#410-30-30-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:36.393Z to 2026-09-10T00:21:36.393Z Record version: sha256:8f9ef429cc5c77d5e98c6547297580d0a3bd74746994dd9814195e9af5e45e32 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Over the duration of a remediation project, individual entities may move from one potentially responsible parties category to another. ##### [410-30-30-4](https://asc.understandingaccounting.org/asc/410/30/#410-30-30-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:36.393Z to 2026-09-10T00:21:36.393Z Record version: sha256:789ac614a4d138e1a7754f05021d6b865ea814365ae21ab77948d31eea47adfa Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In estimating its allocable share of the joint and several remediation liability for a site, there is a rebuttable presumption that costs will be allocated only among participating potentially responsible parties, as that category exists at the date of issuance of the financial statements. ##### [410-30-30-5](https://asc.understandingaccounting.org/asc/410/30/#410-30-30-5) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:36.393Z to 2026-09-10T00:21:36.393Z Record version: sha256:0a0e7a6d8d660f78c83c1784114800f9f18c841b1a591d8096dcae14bd25858a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity shall determine its allocable share of the joint and several remediation liability for a site based on its estimate of the allocation method and percentage that ultimately will be used for the entire remediation effort. The primary sources for this estimate shall be the allocation method and percentages that: 1. a The potentially responsible parties have agreed to (whether that agreement applies to the entire remediation effort or to the costs incurred in the current phase of the remediation process) 2. b Have been assigned by a consultant 3. c Have been determined by the Environmental Protection Agency. ##### [410-30-30-6](https://asc.understandingaccounting.org/asc/410/30/#410-30-30-6) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:36.393Z to 2026-09-10T00:21:36.393Z Record version: sha256:f5fdfef760b3a702451fcaf36d1363eeea9125cd18aba38c3e31287d7fccd476 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If the entity's estimate of the ultimate allocation method and percentage differs significantly from the method or percentage from these primary sources, the entity's estimate should be based on objective, verifiable information. Examples of objective, verifiable information include all of the following: 1. a Existing data about the kinds and quantities of waste at the site 2. b Experience with allocation approaches in comparable situations 3. c Reports of environmental specialists (internal or external) 4. d Internal data refuting Environmental Protection Agency allegations about the entity's contribution of waste (kind, volume, and so forth) to the site. ##### [410-30-30-7](https://asc.understandingaccounting.org/asc/410/30/#410-30-30-7) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:36.393Z to 2026-09-10T00:21:36.393Z Record version: sha256:8ce8ba9f7aee77568233f59916738fb3c70ebe1853a5610c52c5425dad62a2c8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity should assess the likelihood that each potentially responsible party will pay its allocable share of the joint and several remediation liability. That assessment should be based primarily on the financial condition of the participating potentially responsible party. This assessment requires the entity to gain an understanding of the financial condition of the other participating potentially responsible parties and to update and monitor this information as the remediation progresses. The entity shall include in its liability its share of amounts related to the site that will not be paid by other potentially responsible parties or the government. #### Costs to Be Included in Remediation Liability ##### [410-30-30-8](https://asc.understandingaccounting.org/asc/410/30/#410-30-30-8) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:36.393Z to 2026-09-10T00:21:36.393Z Record version: sha256:3afe9f1941b2fc73af67f0e709f1d4ee107e5944a0232ff615f246fa16eca9af Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Once an entity has determined that it is probable that an environmental remediation liability has been incurred, the entity shall estimate that liability based on available information (see also paragraphs [410-30-25-7 through 25-13](https://asc.understandingaccounting.org/asc/410/30/#410-30-25-7) ).The estimate of the liability shall include the entity's: 1. a Allocable share of the liability for a specific site 2. b Share of amounts related to the site that will not be paid by other potentially responsible parties or the government. ##### [410-30-30-9](https://asc.understandingaccounting.org/asc/410/30/#410-30-30-9) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:36.393Z to 2026-09-10T00:21:36.393Z Record version: sha256:74cab661f2007cb41c90e49b5d2117446066e8547e4529511bf9e68289e1d598 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Making the appropriate measurement of an entity's remediation liability involves the following issues: 1. a Costs that should be included in the measurement 2. b Whether the measurement should consider the effects of expected future events or developments, including discounting considerations 3. c How the measurement should be affected by the existence of other potentially responsible parties 4. d How the measurement should be affected by potential recoveries. ##### [410-30-30-10](https://asc.understandingaccounting.org/asc/410/30/#410-30-30-10) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:36.393Z to 2026-09-10T00:21:36.393Z Record version: sha256:755e5c692c546792bcd3f87c223f1d27b155d41ac140b7255b4e8db773bae4b2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Costs to be included in the measurement are the following: 1. a Incremental direct costs of the remediation effort (see paragraph [410-30-55-1](https://asc.understandingaccounting.org/asc/410/30/#410-30-55-1)) 2. b Costs of compensation and benefits for those employees who are expected to devote a significant amount of time directly to the remediation effort, to the extent of the time expected to be spent directly on the remediation effort. ##### [410-30-30-11](https://asc.understandingaccounting.org/asc/410/30/#410-30-30-11) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:36.393Z to 2026-09-10T00:21:36.393Z Record version: sha256:3ca6958cbc86fc3668a2731204c50128e035bb3e92ce657397099e183c1e4664 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The remediation effort is considered on a site-by-site basis; it includes the following: 1. a Precleanup activities, such as the performance of a remedial investigation, risk assessment, or feasibility study and the preparation of a [remedial action](https://asc.understandingaccounting.org/glossary/r/#remedial-action "Related to Superfund: generally long-term actions taken to do any of the following: Investigate, alleviate, or eliminate the effects of a release of a hazardous substance into the environment Investigate, alleviate, or eliminate a threat of the release of an existing hazardous substance that could potentially harm human health or the environment Restore natural resources. Also refers to corrective action under the Resource Conservation and Recovery Act of 1976.") plan and remedial designs for a Superfund site, or the performance of a Resource Conservation and Recovery Act of 1976 facility assessment, facility investigation, or corrective measures studies 2. b Performance of remedial actions under Superfund, corrective actions under the Resource Conservation and Recovery Act of 1976, and analogous actions under state and non-U.S. laws 3. c Government oversight and enforcement-related activities 4. d Operation and maintenance of the remedy, including required postremediation monitoring. ##### [410-30-30-12](https://asc.understandingaccounting.org/asc/410/30/#410-30-30-12) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:36.393Z to 2026-09-10T00:21:36.393Z Record version: sha256:1773a7a87f7732d26d543f2875fae38c943c7df4625f319e8b8dd2d4c2caa197 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Determining any of the following is part of the remediation effort: 1. a The extent of remedial actions that are required 2. b The type of remedial actions to be used 3. c The allocation of costs among potentially responsible parties. The costs of making such determinations, including legal costs, shall be included in the measurement of the remediation liability. ##### [410-30-30-13](https://asc.understandingaccounting.org/asc/410/30/#410-30-30-13) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:36.393Z to 2026-09-10T00:21:36.393Z Record version: sha256:2a462c829aa75ea2d898e1d6ae8c0b18189a1112b19e1e4a18d60c89135bcaea Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The costs of services related to routine environmental compliance matters and litigation costs involved with potential recoveries are not part of the remediation effort. ##### [410-30-30-14](https://asc.understandingaccounting.org/asc/410/30/#410-30-30-14) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:36.393Z to 2026-09-10T00:21:36.393Z Record version: sha256:f8b73eb005f62f27202d8040a80f30cc23d971de24fbe49757aa212d10a573ab Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Litigation costs involved with potential recoveries shall be charged to expense as incurred until realization of the claim for recovery is considered probable and an asset relating to the recovery is recognized, at which time any remaining such legal costs shall be considered in the measurement of the recovery. ##### [410-30-30-15](https://asc.understandingaccounting.org/asc/410/30/#410-30-30-15) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:36.393Z to 2026-09-10T00:21:36.393Z Record version: sha256:419950cf5aa7dbe36cdf2c3f57b4fcd4c3eb5bdc93ab46a189b60b104caa7d22 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The determination of what legal costs are for potential recoveries rather than for determining the allocation of costs among potentially responsible parties will depend on the specific facts and circumstances of each situation. For purposes of measuring environmental remediation liabilities, the measurement shall be based on enacted laws and adopted regulations and policies. No changes should be anticipated. The remedial action plan that is used to develop the estimate of the liability shall be based on the methodology that is expected to be approved to complete the remediation effort. ##### [410-30-30-16](https://asc.understandingaccounting.org/asc/410/30/#410-30-30-16) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:36.393Z to 2026-09-10T00:21:36.393Z Record version: sha256:61b8c81b55ef77087749a064c95364aaf55df17fb8fff387e1dc23020026c9f5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Costs to defend against assertions of liability in the context of environmental remediation liabilities involve determining whether an entity is responsible for participating in a remediation process. ##### [410-30-30-17](https://asc.understandingaccounting.org/asc/410/30/#410-30-30-17) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:36.393Z to 2026-09-10T00:21:36.393Z Record version: sha256:135e7498c315235f1b6913870d59df440283d623d1c16ee1ce3ec51327f02a06 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The measurement of environmental remediation liabilities shall be based on the reporting entity's estimate of what it will cost to perform each of the elements of the remediation effort (determined in accordance with paragraphs [410-30-30-11 through 30-15](https://asc.understandingaccounting.org/asc/410/30/#410-30-30-11) ) when those elements are expected to be performed. Although this approach is sometimes referred to as considering inflation, it does not simply rely on an inflation index (cost estimates submitted to the Environmental Protection Agency usually include a prescribed inflation factor) and should take into account factors such as productivity improvements due to learning from experience with similar sites and similar remedial action plans. In situations in which it is not practicable to estimate inflation and such other factors because of uncertainty about the timing of expenditures, a current-cost estimate would be the minimum in the range of the liability to be recorded until such time as these cost effects can be reasonably estimated. ##### [410-30-30-18](https://asc.understandingaccounting.org/asc/410/30/#410-30-30-18) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:36.393Z to 2026-09-10T00:21:36.393Z Record version: sha256:5c51ef040eef406f098b240daeb72911ba1a9772d2c8c8adca3318704065061a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. When an overall liability is estimated by combining estimates of various components of the liability, additional possible losses present in the component estimates must be considered in determining an overall additional possible loss. ##### [410-30-30-19](https://asc.understandingaccounting.org/asc/410/30/#410-30-30-19) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:36.393Z to 2026-09-10T00:21:36.393Z Record version: sha256:0de65e1ea2b63f6d0133261b54ec14dbdd61746f7133c5ca252e66b38b0abb5a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A probable recovery shall be measured at its undiscounted amount if both of the following criteria are met: 1. a The liability is not discounted. 2. b The timing of the recovery is dependent on the timing of the payment of the liability. For implementation guidance on the second criterion, see paragraph [410-30-55-6](https://asc.understandingaccounting.org/asc/410/30/#410-30-55-6). Source downloaded (UTC): 2026-09-10T00:21:38.042Z to 2026-09-10T00:21:38.042Z Record version: sha256:5f9a00ac62df6b531d9843c4dfedba79b41341ce2313755ffea2f8279c8132ff Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 410-30-35: 35 Subsequent Measurement [Read section](https://asc.understandingaccounting.org/asc/410/30/#35-subsequent-measurement) SEC content: no #### Changes in Estimates ##### [410-30-35-1](https://asc.understandingaccounting.org/asc/410/30/#410-30-35-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:38.042Z to 2026-09-10T00:21:38.042Z Record version: sha256:d85cbbab98b26c7290bdfcdfd73161b6b20b664698beb1d8ca6cd2991f74d339 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Changes in estimates of the entity's remediation liability, including revisions to the entity's estimate of its share of the liability due to negotiation or identification of other potentially responsible parties, shall be accounted for as changes in estimates (see Topic 250). #### Effects of Expected Future Events and Developments ##### [410-30-35-2](https://asc.understandingaccounting.org/asc/410/30/#410-30-35-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:38.042Z to 2026-09-10T00:21:38.042Z Record version: sha256:0cc373d771a472f5a582aa4f89611bc59872bdcf710c1f214300c3aaf3f622b5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Additional complexities arise if other potentially responsible parties are involved in an identified site. The costs associated with remediation of a site ultimately will be assigned and allocated among the various potentially responsible parties. The final allocation of costs may not be known, however, until the remediation effort is substantially complete, and it may or may not be based on an entity's relative direct responsibility at a site. An entity's final obligation depends, among other things, on the willingness of the entity and other potentially responsible parties to negotiate a cost allocation, the results of the entity's negotiation efforts, and the ability of other potentially responsible parties associated with the particular site to fund the remediation effort. ##### [410-30-35-3](https://asc.understandingaccounting.org/asc/410/30/#410-30-35-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:38.042Z to 2026-09-10T00:21:38.042Z Record version: sha256:2e69df5fdcedb9a3fb85e49387fc2c96846a1dc2af041740b32f215de0bef56e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The time period necessary to remediate a particular site may extend several years, and the laws governing the remediation process and the technology available to complete the [remedial action](https://asc.understandingaccounting.org/glossary/r/#remedial-action "Related to Superfund: generally long-term actions taken to do any of the following: Investigate, alleviate, or eliminate the effects of a release of a hazardous substance into the environment Investigate, alleviate, or eliminate a threat of the release of an existing hazardous substance that could potentially harm human health or the environment Restore natural resources. Also refers to corrective action under the Resource Conservation and Recovery Act of 1976.") may change before the remedial action is complete. Additionally, the impact of inflation and productivity improvements can change the estimates of costs to be incurred. ##### [410-30-35-4](https://asc.understandingaccounting.org/asc/410/30/#410-30-35-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:38.042Z to 2026-09-10T00:21:38.042Z Record version: sha256:177f760be96aabeafd4ec505efb7d290bcf66cd0849792c1a03f632c0bba7a63 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The impact of changes in laws, regulations, and policies shall be recognized when such changes are enacted or adopted. ##### [410-30-35-5](https://asc.understandingaccounting.org/asc/410/30/#410-30-35-5) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:38.042Z to 2026-09-10T00:21:38.042Z Record version: sha256:83abd8431ab5e13dc57ae339a080c64a72e68c5b48561eb4105e5e6ce935be80 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Once a methodology has been approved, that methodology and the technology available shall be the basis for estimating the liability until it is probable that there will be formal acceptance of a revised methodology. #### Impairment Tests ##### [410-30-35-6](https://asc.understandingaccounting.org/asc/410/30/#410-30-35-6) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:38.042Z to 2026-09-10T00:21:38.042Z Record version: sha256:d2ee2e11b64ab14af59c65c95e437fcf91dc5178ec394f21a488613def008c8d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For guidance on impairment tests of assets subject to asset retirement obligations, see paragraphs [360-10-35-18 through 35-19](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-18) . #### Impact of Potential Recoveries ##### [410-30-35-7](https://asc.understandingaccounting.org/asc/410/30/#410-30-35-7) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:38.042Z to 2026-09-10T00:21:38.042Z Record version: sha256:1a2f132c40b7f6cbaaa2b08607c994ce76c4052aa3194fcc88af0f990daac9f1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2015-10](https://asc.understandingaccounting.org/updates/asu-2015-10/). ##### [410-30-35-8](https://asc.understandingaccounting.org/asc/410/30/#410-30-35-8) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:38.042Z to 2026-09-10T00:21:38.042Z Record version: sha256:4453441cc8298c214195c365bcc138e0c4443c1568f1d2d8066840b11db62643 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Potential recoveries of amounts expended for environmental remediation are distinguishable from the allocation of costs subject to [joint and several liability](https://asc.understandingaccounting.org/glossary/j/#joint-and-several-liability "Where liability is joint and several, any party deemed liable is potentially responsible for all of the associated costs. This scheme of liability means that any responsible party can potentially be liable for the entire cost of remediating a site, notwithstanding that the party is responsible for only a small amount of the total hazardous substances or waste at the site and did nothing improper."), which is discussed in paragraphs [410-30-30-1 through 30-7](https://asc.understandingaccounting.org/asc/410/30/#410-30-30-1) . Potential recoveries may be claimed from a number of different parties or sources, including insurers, potentially responsible parties other than participating potentially responsible parties (see paragraph [410-30-30-2](https://asc.understandingaccounting.org/asc/410/30/#410-30-30-2)), and governmental or third-party funds. The amount of an environmental remediation liability should be determined independently from any potential claim for recovery, and an asset relating to the recovery shall be recognized only when realization of the claim for recovery is deemed probable. The term _probable_ is used in this Subtopic with the specific technical meaning in paragraph [450-20-25-1](https://asc.understandingaccounting.org/asc/450/20/#450-20-25-1). ##### [410-30-35-9](https://asc.understandingaccounting.org/asc/410/30/#410-30-35-9) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:38.042Z to 2026-09-10T00:21:38.042Z Record version: sha256:6982c188a222e0fc2a38290784c2b52e11c8ed314d1f986ac955fa22bc8fd2aa Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If the claim is the subject of litigation, a rebuttable presumption exists that realization of the claim is not probable. ##### [410-30-35-10](https://asc.understandingaccounting.org/asc/410/30/#410-30-35-10) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:38.042Z to 2026-09-10T00:21:38.042Z Record version: sha256:326730d17c29cc9a16a8df390e6e95e50aec476f59d8d45c6d29e840a1cecd02 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The amount of a potential recovery is measured based on available information and the specific situation (see paragraph [410-30-30-15](https://asc.understandingaccounting.org/asc/410/30/#410-30-30-15)). As indicated in paragraphs [410-30-30-12 through 30-15](https://asc.understandingaccounting.org/asc/410/30/#410-30-30-12) , measurement of a potential recovery requires consideration of transaction costs related to the receipt of the recovery. The time value of money shall be considered in the measurement of a potential recovery when the measurement of the liability considers the time value of money. ##### [410-30-35-11](https://asc.understandingaccounting.org/asc/410/30/#410-30-35-11) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:38.042Z to 2026-09-10T00:21:38.042Z Record version: sha256:b0b5917be6a56bcd7d93c6303624414038cddb1c545bc6956712a0644b6a7c20 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. However, the time value of money should not be considered in the determination of the recorded amount of a potential recovery if the liability is not discounted and the timing of the recovery is dependent on the timing of the payment of the liability. In most circumstances, the point in time at which a liability for environmental remediation is both probable and reasonably estimable will precede the point in time at which any related recovery is probable of realization. ##### [410-30-35-12](https://asc.understandingaccounting.org/asc/410/30/#410-30-35-12) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:38.042Z to 2026-09-10T00:21:38.042Z Record version: sha256:d8a4e3f70caa6285f3b69cc44a903a506b95c392d3f6bc4bb193a354a95b21fa Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The measurement of the liability, or of a component of the liability, may be discounted to reflect the time value of money if the aggregate amount of the liability or component and the amount and timing of cash payments for the liability or component are fixed or reliably determinable. (Note that these criteria would not be met in situations in which paragraph [410-30-30-17](https://asc.understandingaccounting.org/asc/410/30/#410-30-30-17) permits use of a current-cost estimate.) For this purpose, the amount of the liability or component is the reporting entity's allocable share of the undiscounted joint and several liability for the remediation effort or of a component of that liability. ##### [410-30-35-12A](https://asc.understandingaccounting.org/asc/410/30/#410-30-35-12A) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:38.042Z to 2026-09-10T00:21:38.042Z Record version: sha256:36d2468e645998ec1d2c4b5a08393fab9576a3d0aa2a66ade4f1630076688151 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [410-30-30-19](https://asc.understandingaccounting.org/asc/410/30/#410-30-30-19) states criteria under which a probable recovery shall be measured at its undiscounted amount. ##### [410-30-35-13](https://asc.understandingaccounting.org/asc/410/30/#410-30-35-13) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:38.042Z to 2026-09-10T00:21:38.042Z Record version: sha256:3c89e5e3e58072ab87bee8904b9c70294064e78670bb29ced5ac767b11a1ad01 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph not used](https://asc.understandingaccounting.org/updates/page-1833002/). #### Tangible Assets Acquired to Treat Environmental Contamination ##### [410-30-35-14](https://asc.understandingaccounting.org/asc/410/30/#410-30-35-14) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:38.042Z to 2026-09-10T00:21:38.042Z Record version: sha256:c16c81eede3dbefe2589a74d64cd4860072708c4931bed86a0836e0511e31e9b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Tangible assets that have been capitalized under paragraph [410-30-25-19](https://asc.understandingaccounting.org/asc/410/30/#410-30-25-19) shall be depreciated over their remaining useful lives. Source downloaded (UTC): 2026-09-10T00:21:40.209Z to 2026-09-10T00:21:40.209Z Record version: sha256:fecd9e87be6685cdb8aae6ee48f66514b31a564218d352a4eaddbe6483d7e5dc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 410-30-45: 45 Other Presentation Matters [Read section](https://asc.understandingaccounting.org/asc/410/30/#45-other-presentation-matters) SEC content: no ##### [410-30-45-1](https://asc.understandingaccounting.org/asc/410/30/#410-30-45-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:40.209Z to 2026-09-10T00:21:40.209Z Record version: sha256:cd6a229796e97ef9f4e7b1eda3286397dca9cf013da95309cd7ecbbc93f58a2f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity's balance sheet may include several assets that relate to an environmental remediation obligation. Among them are the following: 1. a Receivables from other potentially responsible parties that are not providing initial funding 2. b Anticipated recoveries from insurers 3. c Anticipated recoveries from prior owners as a result of indemnification agreements. ##### [410-30-45-2](https://asc.understandingaccounting.org/asc/410/30/#410-30-45-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:40.209Z to 2026-09-10T00:21:40.209Z Record version: sha256:26ba16791f2c06cd9843f03b3244c308acd59b2765bd2e0f2c84234479d9e6c2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A debtor that has a right of setoff that meets all of the conditions in paragraph [210-20-45-1](https://asc.understandingaccounting.org/asc/210/20/#210-20-45-1) may offset the related asset and liability and report the net amount. It would be rare, if ever, that the facts and circumstances surrounding environmental remediation liabilities and related receivables and potential recoveries would meet all of these conditions. ##### [410-30-45-3](https://asc.understandingaccounting.org/asc/410/30/#410-30-45-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:40.209Z to 2026-09-10T00:21:40.209Z Record version: sha256:52b0c67f736064cdf6bdedccb29f6eb522915d1c9d89dc292ade5414c2436279 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2015-01](https://asc.understandingaccounting.org/updates/asu-2015-01/). ##### [410-30-45-4](https://asc.understandingaccounting.org/asc/410/30/#410-30-45-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:40.209Z to 2026-09-10T00:21:40.209Z Record version: sha256:39f05c273ce6f603acaabe5991584bc5d6c26d6d39964c48d68e89311cf49d13 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Furthermore, it is particularly difficult to substantiate the classification of environmental remediation costs as a component of nonoperating expenses. Because the events underlying the incurrence of the obligation relate to an entity's operations, remediation costs shall be charged against operations. Although charging the costs of remediating past environmental impacts against current operations may appear debatable because of the time between the contribution or transportation of waste materials containing hazardous substances to a site and the subsequent incurrence of remediation costs, environmental remediation-related expenses have become a regular cost of conducting economic activity. Accordingly, environmental remediation-related expenses shall be reported as a component of operating income in income statements that classify items as operating or nonoperating. Credits arising from recoveries of environmental losses from other parties shall be reflected in the same income statement line. Any earnings on assets that are reflected on the entity's financial statements and are earmarked for funding its environmental liabilities shall be reported as investment income. ##### [410-30-45-5](https://asc.understandingaccounting.org/asc/410/30/#410-30-45-5) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:40.209Z to 2026-09-10T00:21:40.209Z Record version: sha256:7e963ce5612a32f0144f70e1414b2ac45efb1605a9d7fb8b811947963b626d86 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Environmental remediation-related expenses and related recoveries attributable to discontinued operations that were accounted for as such in accordance with Subtopic 205-20 shall be classified as discontinued operations. ##### [410-30-45-6](https://asc.understandingaccounting.org/asc/410/30/#410-30-45-6) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:40.209Z to 2026-09-10T00:21:40.209Z Record version: sha256:69a9e5701e4d419037483af345931196bbd9e63c25a65edc2d314c0450c3c85d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2015-01](https://asc.understandingaccounting.org/updates/asu-2015-01/). Source downloaded (UTC): 2026-09-10T00:21:41.845Z to 2026-09-10T00:21:41.845Z Record version: sha256:fad8d223328f56f642c5beb7ad08a20090420176e2071617ac4bd1f2583f441c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 410-30-50: 50 Disclosure [Read section](https://asc.understandingaccounting.org/asc/410/30/#50-disclosure) SEC content: no ##### [410-30-50-1](https://asc.understandingaccounting.org/asc/410/30/#410-30-50-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:41.845Z to 2026-09-10T00:21:41.845Z Record version: sha256:833ae866de2d4f7fa16bc1480b7ce22290cc5955faef9d4436c3748d227d8988 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Disclosure issues are discussed in the context of the following: 1. a Accounting principles 2. b Environmental remediation loss contingencies 3. c Environmental remediation costs recognized currently 4. d Conclusions on loss contingencies and other matters. ##### [410-30-50-2](https://asc.understandingaccounting.org/asc/410/30/#410-30-50-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:41.845Z to 2026-09-10T00:21:41.845Z Record version: sha256:06f2dd2eac070b811ec38884e81f665c60050ed7e5ba7e2a797f1c50ca3251b4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The disclosures discussed in these contexts are two-tiered: 1. a Disclosures that are required 2. b Disclosures that are encouraged, but not required. ##### [410-30-50-3](https://asc.understandingaccounting.org/asc/410/30/#410-30-50-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:41.845Z to 2026-09-10T00:21:41.845Z Record version: sha256:64dd24da653de590893bbcfb04160ca81ee15f8ac4cebe2916dc5a7e9b1ba83c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic does not discourage entities from disclosing additional information that they believe will further users' understanding of the entity's financial statements. #### Disclosures that Are Required ##### [410-30-50-4](https://asc.understandingaccounting.org/asc/410/30/#410-30-50-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:41.845Z to 2026-09-10T00:21:41.845Z Record version: sha256:9ad8e5f114004edb23f3d397bb612b5e9e621165cfce72f9c8a336d6bdef1934 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. With respect to environmental remediation obligations, financial statements shall disclose whether the accrual for environmental remediation liabilities is measured on a discounted basis. If an entity utilizes present-value measurement techniques, additional disclosures are appropriate, and are discussed further in paragraph [410-30-50-7](https://asc.understandingaccounting.org/asc/410/30/#410-30-50-7) (see paragraph [410-30-55-14](https://asc.understandingaccounting.org/asc/410/30/#410-30-55-14)). ##### [410-30-50-5](https://asc.understandingaccounting.org/asc/410/30/#410-30-50-5) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:41.845Z to 2026-09-10T00:21:41.845Z Record version: sha256:b41674f7c191838673a5f83e0366b7b4fd08806582ce5990e42416a294f05fbe Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Subtopic 450-20 provides the primary guidance applicable to disclosures of environmental remediation loss contingencies. ##### [410-30-50-6](https://asc.understandingaccounting.org/asc/410/30/#410-30-50-6) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:41.845Z to 2026-09-10T00:21:41.845Z Record version: sha256:7d8882f9094049faf12a58ae456fb9244dff43480c1f1a00f7c6e08f72b026c6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The disclosure requirements of Subtopic 275-10 also apply to environmental remediation liabilities. Example 1 (paragraph [410-30-55-7](https://asc.understandingaccounting.org/asc/410/30/#410-30-55-7)) illustrates the application of those disclosure requirements. ##### [410-30-50-7](https://asc.understandingaccounting.org/asc/410/30/#410-30-50-7) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:41.845Z to 2026-09-10T00:21:41.845Z Record version: sha256:3d12a3574af689540b5b5c0d9345f424fa3e501b6da62188a99092cd44f3c4d1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. With respect to recorded accruals for environmental remediation loss contingencies and assets for third-party recoveries related to environmental remediation obligations, financial statements shall disclose if any portion of the accrued obligation is discounted, the undiscounted amount of the obligation, and the discount rate used in the present-value determinations. #### Disclosures that Are Encouraged but Not Required ##### [410-30-50-8](https://asc.understandingaccounting.org/asc/410/30/#410-30-50-8) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:41.845Z to 2026-09-10T00:21:41.845Z Record version: sha256:ae63618febf25d4c594ea7fb1c7eafddec0204552d590738a6b87f07316a8139 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Because environmental remediation costs have become increasingly significant, and because the accounting for many environmental loss contingencies often involves subjective judgments, disclosure of accrual benchmarks for remediation obligations is useful to further users' understanding of the entity's financial statements. Accordingly, entities are encouraged, but not required, to disclose the event, situation, or set of circumstances that generally triggers recognition of loss contingencies that arise out of the entity's environmental remediation-related obligations (for example, during or upon completion of the feasibility study). Also, entities are encouraged to disclose their policy concerning the timing of recognition of recoveries. (See Example 2 \[paragraph [410-30-55-14](https://asc.understandingaccounting.org/asc/410/30/#410-30-55-14)\].) ##### [410-30-50-9](https://asc.understandingaccounting.org/asc/410/30/#410-30-50-9) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:41.845Z to 2026-09-10T00:21:41.845Z Record version: sha256:28d40bcf26ef00abbe29e3025c1c94974b5ae7297b9049df8db93be5f8f6f54d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Uncertainties associated with environmental remediation loss contingencies are pervasive, and they often result in wide ranges of reasonably possible losses with respect to such contingencies. Further, resolution of the uncertainties and the cash-flow effects of the loss contingencies often occur over a span of many years. Accordingly, this Subtopic encourages, but does not require, additional specific disclosures with respect to environmental remediation loss contingencies that would be useful to further users' understanding of the entity's financial statements. ##### [410-30-50-10](https://asc.understandingaccounting.org/asc/410/30/#410-30-50-10) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:41.845Z to 2026-09-10T00:21:41.845Z Record version: sha256:562eb4086c62a6a2f4de725716b2739a57080a32a0bd1414f60848d81439fcee Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Entities also are encouraged (see paragraph [410-30-55-15 through 55-16](https://asc.understandingaccounting.org/asc/410/30/#410-30-55-15) ), but not required, to disclose the following: 1. a The estimated time frame of disbursements for recorded amounts if expenditures are expected to continue over the long term 2. b The estimated time frame for realization of recognized probable recoveries, if realization is not expected in the near term 3. c If an estimate of the probable or reasonably possible loss or range of loss cannot be made, the reasons why it cannot be made 4. d If information about the reasonably possible loss or the recognized and additional reasonably possible loss for an environmental remediation obligation related to an individual site is relevant to an understanding of the financial position, cash flows, or results of operations of the entity, the following with respect to the site: 1. 1 The total amount accrued for the site 2. 2 The nature of any reasonably possible loss contingency or additional loss, and an estimate of the possible loss or the fact that an estimate cannot be made and the reasons why it cannot be made 3. 3 Whether other potentially responsible parties are involved and the entity's estimated share of the obligation 4. 4 The status of regulatory proceedings 5. 5 The estimated time frame for resolution of the contingency. ##### [410-30-50-11](https://asc.understandingaccounting.org/asc/410/30/#410-30-50-11) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:41.845Z to 2026-09-10T00:21:41.845Z Record version: sha256:e7fcb848a606de953b6743937f5b6aeb72940197fe441ce3fd51c59ba4d7d831 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Entities also are encouraged, but not required, to disclose the estimated time frame for resolution of the uncertainty as to the amount of the loss (see paragraph [410-30-55-17](https://asc.understandingaccounting.org/asc/410/30/#410-30-55-17)). ##### [410-30-50-12](https://asc.understandingaccounting.org/asc/410/30/#410-30-50-12) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:41.845Z to 2026-09-10T00:21:41.845Z Record version: sha256:7ddb192d31fcca567ecbd2eef3ece4f1e93987314e1b5d20f9a29a0c91b4026c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Entities are encouraged but not required to disclose the amount of environmental remediation costs recognized in the income statement in the following detail: 1. a The amount recognized for environmental remediation loss contingencies in each period 2. b The amount of any recovery from third parties that is credited to environmental remediation costs in each period 3. c The income statement caption in which environmental remediation costs and credits are included. See paragraphs [410-30-55-14 through 55-15](https://asc.understandingaccounting.org/asc/410/30/#410-30-55-14) . #### Disclosure Related to Loss Contingencies ##### [410-30-50-13](https://asc.understandingaccounting.org/asc/410/30/#410-30-50-13) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:41.845Z to 2026-09-10T00:21:41.845Z Record version: sha256:635e30bd297f28f3f9181cefe38fb66fcb0188fd9cc7de5e70dec010a79669e2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Whether notification by regulatory authorities in relation to particular environmental laws and regulations constitutes the assertion of a claim is a matter of legal determination. If an entity concludes that it has no current [legal obligation](https://asc.understandingaccounting.org/glossary/l/#legal-obligation "An obligation that a party is required to settle as a result of an existing or enacted law, statute, ordinance, or written or oral contract or by legal construction of a contract under the doctrine of promissory estoppel.") to remediate a situation of probable or possible environmental impact, then in accordance with paragraph [450-20-50-6](https://asc.understandingaccounting.org/asc/450/20/#450-20-50-6) no disclosure is required. However, if an entity is required by existing laws and regulations to report the [release](https://asc.understandingaccounting.org/glossary/r/#release "Related to Superfund: any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, or disposing into the environment. Includes the abandonment or discarding of barrels, containers, and other closed receptacles containing any hazardous substance, pollutant, or contaminant. The law provides for several exclusions. Release also means the substantial threat of release.") of hazardous substances and to begin a remediation study or if assertion of a claim is deemed probable, the matter would represent a loss contingency subject to the disclosure provisions of paragraphs [450-20-50-3 through 50-4](https://asc.understandingaccounting.org/asc/450/20/#450-20-50-3) , regardless of a lack of involvement by a regulatory agency. ##### [410-30-50-14](https://asc.understandingaccounting.org/asc/410/30/#410-30-50-14) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:41.845Z to 2026-09-10T00:21:41.845Z Record version: sha256:9c8199c32de2f4fb3979d3f1c82e316bb025efcc5b415b1ede61663c186bdfa3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Financial statements may include a contingency conclusion that addresses the estimated total unrecognized exposure to environmental remediation and other loss contingencies. Such contingency conclusions may state, for example, that "management believes that the outcome of these uncertainties should not have \[or "may have"\] a material adverse effect on the financial condition, cash flows, or operating results of the entity." Alternatively, the disclosure may indicate that the adverse effect could be material to a particular financial statement or to results and cash flows of a quarterly or annual reporting period. ##### [410-30-50-15](https://asc.understandingaccounting.org/asc/410/30/#410-30-50-15) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:41.845Z to 2026-09-10T00:21:41.845Z Record version: sha256:b38ecf97730cddfda174ce672ac4c383c747b2936b73d856bbf37db6b2fce0a6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Although potentially useful information, these conclusions are not a substitute for the required disclosures of this Subtopic and of Subtopic 450-20, such as their requirement to disclose the amounts of material reasonably possible additional losses or to state that such an estimate cannot be made. ##### [410-30-50-16](https://asc.understandingaccounting.org/asc/410/30/#410-30-50-16) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:41.845Z to 2026-09-10T00:21:41.845Z Record version: sha256:1419fcf074f73b71bf0efdd95f15b8064b4a589ca48f992b06c3c0cfa7851b51 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Also, the assertion that the outcome should not have a material adverse effect must be supportable. If the entity is unable to estimate the maximum end of the range of possible outcomes, it may be difficult to support an assertion that the outcome should not have a material adverse effect. ##### [410-30-50-17](https://asc.understandingaccounting.org/asc/410/30/#410-30-50-17) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:41.845Z to 2026-09-10T00:21:41.845Z Record version: sha256:892e2ee9ac559f0222e7f77b735b746f5798b3e40ea9c59aac4ab990542d781e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Entities may wish to provide a description of the general applicability and impact of environmental laws and regulations upon their business and how the existence of such laws and regulations may give rise to loss contingencies for future environmental remediation. Such disclosures often acknowledge the uncertainty of the effect of possible future changes to environmental laws and their application, and they are frequently made on an aggregated basis, considering the entity's total exposures for all its environmental sites. Source downloaded (UTC): 2026-09-10T00:21:44.319Z to 2026-09-10T00:21:44.319Z Record version: sha256:137bd075e23331fb748c781475ac8f698c082a27822dad4eb11e0605563fa005 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 410-30-55: 55 Implementation Guidance and Illustrations [Read section](https://asc.understandingaccounting.org/asc/410/30/#55-implementation-guidance-and-illustrations) SEC content: no #### Implementation Guidance ##### [410-30-55-1](https://asc.understandingaccounting.org/asc/410/30/#410-30-55-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:44.319Z to 2026-09-10T00:21:44.319Z Record version: sha256:93764f947c72590e5b4155dd89684b0a103e1fbc4fe5fad3fc0efd9fe896a9d5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This implementation guidance illustrates paragraphs [410-30-30-10 through 30-11](https://asc.understandingaccounting.org/asc/410/30/#410-30-30-10) . Examples of incremental direct costs of the remediation effort include the following: 1. a Fees to outside law firms for work related to determining the extent of [remedial actions](https://asc.understandingaccounting.org/glossary/r/#remedial-action "Related to Superfund: generally long-term actions taken to do any of the following: Investigate, alleviate, or eliminate the effects of a release of a hazardous substance into the environment Investigate, alleviate, or eliminate a threat of the release of an existing hazardous substance that could potentially harm human health or the environment Restore natural resources. Also refers to corrective action under the Resource Conservation and Recovery Act of 1976.") that are required, the type of remedial actions to be used, or the allocation of costs among potentially responsible parties 2. b Costs related to completing the [remedial investigation-feasibility study](https://asc.understandingaccounting.org/glossary/r/#remedial-investigation-feasibility-study "Extensive technical studies conducted by the government or by the potentially responsible parties to investigate the scope of site impacts and determine the remedial alternatives that, consistent with the National Contingency Plan, may be implemented at a Superfund site. Government-funded remedial investigation-feasibility studies do not recommend a specific alternative for implementation. Remedial investigation-feasibility studies conducted by potentially responsible parties usually do recommend and technically support a remedial alternative. A remedial investigation-feasibility study may include a variety of on- and off-site activities, such as monitoring, sampling, and analysis.") 3. c Fees to outside engineering and consulting firms for site investigations and the development of remedial action plans and remedial designs 4. d Costs of contractors performing remedial actions 5. e Governmental oversight costs and past costs; usually this is based on the cost incurred by the Environmental Protection Agency or other governmental authority dealing with the site 6. f The cost of machinery and equipment that is dedicated to the remedial actions and that does not have an alternative use 7. g Assessments by a potentially responsible party group covering costs incurred by the group in dealing with a site 8. h Costs of operation and maintenance of the remedial action, including the costs of postremediation monitoring required by the remedial action plan. ##### [410-30-55-2](https://asc.understandingaccounting.org/asc/410/30/#410-30-55-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:44.319Z to 2026-09-10T00:21:44.319Z Record version: sha256:b9ceb176393a769c7c12431801a53ae5e60bcc9aed1d1911e1e81b7791927a0f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Examples of employees who may devote a significant amount of time directly to the remediation effort include the following: 1. a The internal legal staff that is involved with the determination of the extent of remedial actions that are required, the type of remedial action to be used, and the allocation of costs among potentially responsible parties 2. b Technical employees who are involved with the remediation effort. ##### [410-30-55-3](https://asc.understandingaccounting.org/asc/410/30/#410-30-55-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:44.319Z to 2026-09-10T00:21:44.319Z Record version: sha256:1450a78f59e1527f13892c4e182e2066c2acec9e193201b00acb134908824828 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Estimates of the compensation and benefits costs to be incurred for a specific site should be made in connection with the initial recording of the remediation liability and subsequently adjusted at each reporting date to reflect the current estimate of such costs to be incurred in the future. ##### [410-30-55-4](https://asc.understandingaccounting.org/asc/410/30/#410-30-55-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:44.319Z to 2026-09-10T00:21:44.319Z Record version: sha256:f391428044aff026c7ead787d73855c4304fc723157686f3d2a83e75170b414e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. There are numerous ways to allocate liabilities among potentially responsible parties. The four principal factors considered in a typical allocation process are the following: 1. a Elements of fair share. Examples are the amount of waste based on volume; the amount of waste based on mass, type of waste, toxicity of waste; the length of time the site was used. 2. b Classification of potentially responsible party. Examples are site owner, site operator, transporter of waste, generator of waste. 3. c Limitations on payments. This characteristic includes any statutory or regulatory limitations on contributions that may be applicable to a potentially responsible party. For example, in the reauthorization of the Comprehensive Environmental Response, Compensation, and Liability Act, it has been proposed that the statute limit the contribution of a municipality to 10 percent of the total remediation liability, irrespective of the municipality's allocable share. 4. d Degree of care. This refers to the degree of care exercised in selecting the site or in selecting a transporter. ##### [410-30-55-5](https://asc.understandingaccounting.org/asc/410/30/#410-30-55-5) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:44.319Z to 2026-09-10T00:21:44.319Z Record version: sha256:e0dcb60eb5679c02da3eedd23fb3f09f1e249d769f4ada68bbcb3dbd014176ab Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Potentially responsible parties may reach an agreement among themselves as to the allocation method and percentages to be used, they may hire an allocation consultant whose conclusions may or may not be binding, or they may request a nonbinding allocation of responsibility from the Environmental Protection Agency. The allocation method or percentages used may change as the remediation project moves forward. An agreement to reallocate the preliminarily allocated liability at the end of the remediation project may exist, or the allocation percentages may be adjusted during the project to reflect prior allocations that subsequently are agreed to have been inequitable. This implementation guidance illustrates paragraph [410-30-30-1](https://asc.understandingaccounting.org/asc/410/30/#410-30-30-1). ##### [410-30-55-6](https://asc.understandingaccounting.org/asc/410/30/#410-30-55-6) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:44.319Z to 2026-09-10T00:21:44.319Z Record version: sha256:fa29e7177481c9dd217c82c9370a062234c300a26fc8b93905b7f66a6d50fb2a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This implementation guidance addresses the criterion in paragraph [410-30-30-19(b)](https://asc.understandingaccounting.org/asc/410/30/#410-30-30-19) involving the dependency of the timing of the recovery on the timing of the payment of the liability. That criterion would usually be met, for example, if an insurance entity agrees, in accordance with the terms of an insurance contract, to reimburse the reporting entity for all or a percentage of the remediation costs incurred by the reporting entity as the reporting entity expends money to satisfy its obligation. That criterion likely would not be met, for example, in a lump-sum buyout by an insurance entity of contested coverage. #### Illustrations ##### [410-30-55-7](https://asc.understandingaccounting.org/asc/410/30/#410-30-55-7) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:44.319Z to 2026-09-10T00:21:44.319Z Record version: sha256:67426dd7173d0c55aaca8ef7bcaff6f6ec7dac5d9f4ef38e8a896f501c97325c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates application of the disclosure requirements of Subtopic 275-10. ##### [410-30-55-8](https://asc.understandingaccounting.org/asc/410/30/#410-30-55-8) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:44.319Z to 2026-09-10T00:21:44.319Z Record version: sha256:83b6bb442910ca0e9b2f5d2df66b4a1b93446455722e74164ca31387322a53ad Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Ace Oil Company is a distributor of heating oil with four storage and distribution facilities located in Anystate. Federal, state, and local laws and regulations govern the operation of the entity's facilities. The entity has determined that, beginning in the coming year, a significant number of its storage tanks and a significant amount of its other equipment will need to be removed, replaced, or modified to satisfy regulations that go into effect in varying stages over the next seven years. In addition, the entity has a present obligation to decontaminate the soil in the near term at its largest facility. ##### [410-30-55-9](https://asc.understandingaccounting.org/asc/410/30/#410-30-55-9) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:44.319Z to 2026-09-10T00:21:44.319Z Record version: sha256:4f26b220b43d0f6248664839eee1c2f1355cde73f50ff70475fa25f1b3df702b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The entity hired a consultant to evaluate the technological, regulatory, and legal factors involved. Based on the consultant's findings, the entity estimated that total environmental expenditures over the next 7 years related to the tanks and equipment will aggregate approximately $5 million. Of this amount, approximately $4.75 million represents capital expenditures, which are expected to be recoverable through operations. The existing tanks have a net book value of $500,000, and the equipment has a net book value of $475,000. The cost of soil decontamination is estimated to be at least $1 million, which is material to the entity's operations, and may be as high as $3 million. Exposure to legal liability to third parties is considered remote. ##### [410-30-55-10](https://asc.understandingaccounting.org/asc/410/30/#410-30-55-10) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:44.319Z to 2026-09-10T00:21:44.319Z Record version: sha256:5ace42384dbccdbd47a76a846c49d822790669b18772773e5c1107754fdc0385 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The consultant has demonstrated substantial experience with similar sites, and the technical aspects of upgrading storage facilities and decontaminating soil appear to be fairly straightforward. ##### [410-30-55-11](https://asc.understandingaccounting.org/asc/410/30/#410-30-55-11) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:44.319Z to 2026-09-10T00:21:44.319Z Record version: sha256:eebf4f11559ce12089bee58f3322cdb6e4649b4899a78a494b979513b6144781 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The entity would disclose the following. (The italicized text illustrates the voluntary disclosure that is encouraged by paragraph [275-10-50-9](https://asc.understandingaccounting.org/asc/275/10/#275-10-50-9).) - The entity will begin a project to decontaminate the soil at its Anytown, Anystate facility in the coming year. The entity estimates the cost of decontamination to total at least $1 million and has accrued that amount as an operating expense in the current year. The ultimate cost, however, _will depend on the extent of contamination found as the project progresses and_ may be as much as $3 million. The entity expects decontamination to be substantially completed within one year. ##### [410-30-55-12](https://asc.understandingaccounting.org/asc/410/30/#410-30-55-12) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:44.319Z to 2026-09-10T00:21:44.319Z Record version: sha256:68c9227ac1c2fad0b41ee40d5bf50b7906de9546b472c2bd28c05d96cdcf5a10 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This disclosure informs financial statement users of the existence of the soil contamination problem at the financial statement date and indicates that the liability is susceptible to change in the near term. This Subtopic does not require disclosure of the capital commitment because it is not a present obligation for which an estimate is reflected in the entity's financial statements. ##### [410-30-55-13](https://asc.understandingaccounting.org/asc/410/30/#410-30-55-13) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:44.319Z to 2026-09-10T00:21:44.319Z Record version: sha256:70e3e29fb4f25f04571c510d6d6f8016baef5e74718bb7411affc04925deba97 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Although, in this Example, the near-term nature of the possible change is indicated by a statement that the entity expects decontamination to be substantially completed within one year, an expectation that decontamination will take more than one year to complete would not preclude the estimate from being susceptible to near-term change. In such cases, the disclosure could be worded to specifically refer to the near term. ##### [410-30-55-14](https://asc.understandingaccounting.org/asc/410/30/#410-30-55-14) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:44.319Z to 2026-09-10T00:21:44.319Z Record version: sha256:48a3ef8903c1b4350d778595cebda91d2af8cd4e424a4da2a8191e2ce42cbe5e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the guidance in paragraph [410-30-50-4](https://asc.understandingaccounting.org/asc/410/30/#410-30-50-4) for accounting policies note disclosure for environmental remediation-related costs (information that is enclosed in brackets is not required). - Environmental Remediation Costs—\[Entity A accrues for losses associated with environmental remediation obligations when such losses are probable and reasonably estimable. Accruals for estimated losses from environmental remediation obligations generally are recognized no later than completion of the remedial feasibility study. Such accruals are adjusted as further information develops or circumstances change.\] Costs of future expenditures for environmental remediation obligations are not discounted to their present value. \[Recoveries of environmental remediation costs from other parties are recorded as assets when their receipt is deemed probable.\] ##### [410-30-55-15](https://asc.understandingaccounting.org/asc/410/30/#410-30-55-15) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:44.319Z to 2026-09-10T00:21:44.319Z Record version: sha256:f2d237330ebf527fe0a293b157debf7f710f9e9c2091b069cb2fd3926dabb992 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the guidance in paragraph [410-30-50-10](https://asc.understandingaccounting.org/asc/410/30/#410-30-50-10) for disclosure for a situation in which all of the following conditions exist: 1. a An entity is involved in a single environmental site at which a number of potential outcomes may occur. 2. b There is a probable, reasonably estimable recovery from a third party. 3. c The entity has accrued for the most likely outcome within a range of possible outcomes for each component. 4. d The nature of the amounts accrued for remediation and the related probable recovery are necessary to be disclosed in order for the financial statements not to be misleading. 5. e There is a reasonably possible loss exposure in excess of the amount accrued that is material and it is reasonably possible that a change in estimate that would be material to the financial statements will occur in the near term. ##### [410-30-55-16](https://asc.understandingaccounting.org/asc/410/30/#410-30-55-16) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:44.319Z to 2026-09-10T00:21:44.319Z Record version: sha256:065b56da365866424244f16103b36c1185a78c73344e4640056f079c58202224 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The entity would make the following disclosure (information that is enclosed in brackets is not required). - Entity A has been notified by the Environmental Protection Agency that it is a potentially responsible party under Superfund legislation \[with respect to XYZ site in Sometown, USA, a [disposal](https://asc.understandingaccounting.org/glossary/d/#disposal "Related to the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 and the Resource Conservation and Recovery Act of 1976: under the Resource Conservation and Recovery Act of 1976, the discharge, deposit, injection, dumping, spilling, leaking, or placing of any solid waste or hazardous waste into or on any land or water so that such solid waste or hazardous waste or any constituent thereof may enter the environment or be emitted into the air or discharged into any waters, including groundwaters. Similarly under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 with regard to hazardous substances.") site previously used in its chemical-fertilizer business. The Environmental Protection Agency has also identified 10 other potentially responsible parties for XYZ. A remedial investigation and feasibility study has been completed, and the results of that study have been forwarded to the Environmental Protection Agency. The study indicates a range of viable remedial approaches, but agreement has not yet been reached with the Environmental Protection Agency on the final remediation approach. The potentially responsible party group has preliminarily agreed to an allocation that sets Entity A's share of the cost of remediating XYZ site at 6 percent.\] Entity A has accrued its best estimate of its obligation with respect to the site at December 31, 199X, \[which is $10 million and which is included in long-term liabilities and is expected to be disbursed over the next 10 years. If certain of the potentially responsible parties are ultimately not able to fund their allocated shares or the Environmental Protection Agency insists on a more expensive remediation approach,\] Entity A could incur additional obligations of up to $7 million. It is reasonably possible that Entity A's recorded estimate of its obligation may change in the near term. - With respect to the environmental obligation discussed above, the site was acquired in 1982, and, in connection with that acquisition, the former owner partially indemnified Entity A for environmental impacts occurring before the acquisition. \[Based on existing documentation indicating the years in which the business shipped wastes to XYZ and the terms of the indemnification in the acquisition agreement,\] Entity A \[believes it is probable that it will recover from the prior owners 50 percent of its allocated remediation costs for XYZ and, accordingly,\] has recorded a receivable of $5 million at December 31, 199X. ##### [410-30-55-17](https://asc.understandingaccounting.org/asc/410/30/#410-30-55-17) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:44.319Z to 2026-09-10T00:21:44.319Z Record version: sha256:5858210fc8a03c6c7532e22eb14741404bd70eb1bdb23dee8d2cca461eaf0266 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the guidance in paragraph [410-30-50-11](https://asc.understandingaccounting.org/asc/410/30/#410-30-50-11). An entity would make the following disclosure of a probable but not yet reasonably estimable environmental remediation loss contingency (information that enclosed in brackets is not required). - Entity A has been notified by the Environmental Protection Agency that it is a potentially responsible party with respect to environmental impacts \[identified at the XYZ site in Sometown, USA. Several meetings have been held with the Environmental Protection Agency and the other identified potentially responsible parties, and a remedial investigation has recently commenced\]. Although a loss is probable, it is not possible at this time to reasonably estimate the amount of any obligation for remediation \[of XYZ site\] that would be material to Entity A's financial statements \[because the extent of environmental impact, allocation among the potentially responsible parties, remediation alternatives (which could involve no or minimal efforts), and concurrence of the regulatory authorities have not yet advanced to the stage where a reasonable estimate of any loss that would be material to the entity can be made\]. \[A reasonable estimate of a material obligation, if any, is expected to be possible in 199X.\] ##### [410-30-55-18](https://asc.understandingaccounting.org/asc/410/30/#410-30-55-18) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:44.319Z to 2026-09-10T00:21:44.319Z Record version: sha256:29a095bbec79ce0ec7e66fa30ea57274ca6f8eb83e4b5b6b7c89b01abe60db57 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following Cases illustrate the guidance in paragraphs [410-30-25-16 through 25-19](https://asc.understandingaccounting.org/asc/410/30/#410-30-25-16) : 1. a Tanker oil spill (Case A) 2. b Rusty chemical storage tank (Case B) 3. c Air pollution caused by manufacturing activities (Case C) 4. d Lead pipes in office building that contaminate drinking water (Case D) 5. e Soil contamination caused by an operating garbage dump (Case E) 6. f Water well contamination (Case F) 7. g Underground gasoline storage tank leak (Case G) 8. h Air in office building contaminated with asbestos fibers (Case H). ##### [410-30-55-19](https://asc.understandingaccounting.org/asc/410/30/#410-30-55-19) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:44.319Z to 2026-09-10T00:21:44.319Z Record version: sha256:2bb759466f2f9768cce5d83933f9d0c621c39b605d00e966fb97d86d99c12214 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following table provides a summary for determining whether costs to treat environmental contamination should be capitalized or charged to expense. - ![](https://asc.understandingaccounting.org/asc-img/GUID-A67CDE38-469D-437C-BED9-054049B027CF-low.gif) "Environmental Contamination, Treatments" Evaluation of Criteria Tanker Oil Spill: A. Clean up waterway and beachfront 1. Costs to clean up the waterway and beachfront are not eligible for consideration under the first criterion because the oil company does not own the property. 2. The cleanup of the waterway and beachfront does not mitigate or prevent a future oil spill from future operations. "3. The waterway and beachfront are not owned assets and, therefore, the third criterion does not apply." Conclusion: Costs incurred for cleanup and restoration in connection with the oil spill should be charged to expense. B. Reinforce tanker's hull to reduce risk of future spill 1. Reinforcing the hull improves the tanker's safety compared to when the tanker was originally constructed or acquired. 2. Reinforcing the hull mitigates the risk that the tanker will experience a similar oil spill during future operations and improves the tanker's safety compared to when the tanker was originally constructed or acquired. Conclusion: The costs incurred in connection with reinforcing the tanker's hull may be capitalized under either the first or second criterion. ##### [410-30-55-20](https://asc.understandingaccounting.org/asc/410/30/#410-30-55-20) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:44.319Z to 2026-09-10T00:21:44.319Z Record version: sha256:d23626895390d0acdda36dff8cc78dcc1f469824a3f95e35bf2eeeb08b517417 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following table provides a summary for determining whether costs to treat environmental contamination should be capitalized or charged to expense. - ![](https://asc.understandingaccounting.org/asc-img/GUID-2FACBCC3-9DC1-4D7D-9D90-F9F394492B56-low.gif) "Environmental Contamination, Treatments" Evaluation of Criteria Rusty Chemical Storage Tank: A. Remove rust that developed during ownership 1. Removing the rust has not improved the tank compared with its condition when built or acquired. "2. Removing the rust has mitigated the possibility of future leaks. However, removing the rust has not improved the tank compared with its condition when built or acquired." Conclusion: Rust removal costs should be expensed unless the tank is currently held for sale and the costs were incurred to prepare the tank for sale. B. Apply rust prevention chemicals 1. The application of rust prevention chemicals has improved the tank's condition compared with its condition when built or acquired. 2. Rust prevention chemicals mitigate the possibility that future rust will cause leaks and also improve the tank's condition compared with its condition when built or acquired. Conclusion: The costs of applying the rust prevention chemicals may be capitalized under either the first or second criterion. ##### [410-30-55-21](https://asc.understandingaccounting.org/asc/410/30/#410-30-55-21) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:44.319Z to 2026-09-10T00:21:44.319Z Record version: sha256:659d4de0b4db7d98af3c146eeef75dd10c2ae6905ffde67cfce0d7131b1d68c1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following table provides a summary for determining whether costs to treat environmental contamination should be capitalized or charged to expense. - ![](https://asc.understandingaccounting.org/asc-img/GUID-6071CD53-BEF9-400A-913B-741A5E7146EE-low.gif) "Environmental Contamination, Treatments" Evaluation of Criteria Air Pollution Caused by Manufacturing Activities: A. Acquire and install pollution control equipment 1. The pollution control equipment improves the safety of the plant compared with its condition when built or acquired. 2. The pollution control equipment mitigates or prevents air pollution that has yet to occur but that may otherwise result from future operation of the plant and improves the safety of the plant compared with its condition when built or acquired. Conclusion: Costs associated with acquisition and installation of the pollution control equipment may be capitalized under either the first or second criterion. B. Pay fines for violations of the Clean Air Act "1. Payment of fines does not extend the plant's life, increase its capacity, or improve its efficiency or safety." 2. Payment of fines does not mitigate or prevent pollution that has yet to occur but that may otherwise result from future operation of the plant. "Conclusion: Fines paid in connection with violations of the Clean Air Act should be charged to expense. Even if the plant is currently held for sale, the fines should be charged to expense because the costs would not have been incurred to prepare the plant for sale." ##### [410-30-55-22](https://asc.understandingaccounting.org/asc/410/30/#410-30-55-22) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:44.319Z to 2026-09-10T00:21:44.319Z Record version: sha256:fb90a4995493b0c60f3b1b440ca52ab44d19d7f0c62cd90c92adf2ead06453ca Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following table provides a summary for determining whether costs to treat environmental contamination should be capitalized or charged to expense. - ![](https://asc.understandingaccounting.org/asc-img/GUID-90D05D26-FC6D-4AB8-AA55-CAB17654695F-low.gif) "Environmental Contamination, Treatments" Evaluation of Criteria Lead Pipes in Office Building Contaminate Drinking Water: A. Remove lead pipes and replace with copper pipes 1. Removing the lead pipes has improved the safety of the building's water system compared with its condition when the water system was built or acquired. "2. By removing the lead pipes, the building's owner eliminated an existing environmental problem and prevented any further contamination from that lead. However, by removing the existing pipes, the building's owner has not mitigated or prevented environmental problems yet to occur, if any, from future operation of the building." Conclusion: Costs to remove the lead pipes and install copper pipes may be capitalized under the first criterion. The book value of the lead pipes should be charged to expense when removed. ##### [410-30-55-23](https://asc.understandingaccounting.org/asc/410/30/#410-30-55-23) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:44.319Z to 2026-09-10T00:21:44.319Z Record version: sha256:2acb44ab5e0854a6c6a806ae54b6d7810be0e74fbb67c357fc6102091ebf3822 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following table provides a summary for determining whether costs to treat environmental contamination should be capitalized or charged to expense. - ![](https://asc.understandingaccounting.org/asc-img/GUID-E0F66C38-937F-462D-B9BD-476924BA3532-low.gif) "Environmental Contamination, Treatments" Evaluation of Criteria Soil Contamination Caused by an Operating Garbage Dump: A. Refine soil on dump property "1. The life of a garbage dump is not extended by refining its soil. Further, the condition of the soil after refining will not be improved over its condition when the garbage dump was constructed or acquired. Removal of the toxic waste restores the soil to its original uncontaminated condition." "2. Removal of toxic waste from the soil addresses an existing environmental concern. It also prevents that waste from leaching in the future. However, removing the waste does not mitigate or prevent future operations from creating future toxic waste. The risk will continue regardless of how much of the existing soil is refined." Conclusion: Soil refinement costs should be charged to expense unless the garbage dump is currently held for sale and the costs were incurred to prepare the garbage dump for sale. B. Install liner "1. The liner does not extend the useful life or improve the efficiency or capacity of the garbage dump. However, the liner has improved the garbage dump's safety compared to when the dump was constructed or acquired." "2. The liner addresses an existing and potential future problem. In this example, the garbage dump contains toxic waste from past operations and will likely generate toxic waste during future operations. The liner partly addresses the existing environmental problem by preventing future leaching of existing toxic waste into the soil. The liner also mitigates or prevents leaching of toxic waste that may result from garbage dumping in future periods and has improved the garbage dump's safety compared to when the dump was constructed or acquired." Conclusion: The liner may be capitalized under either the first or second criterion. ##### [410-30-55-24](https://asc.understandingaccounting.org/asc/410/30/#410-30-55-24) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:44.319Z to 2026-09-10T00:21:44.319Z Record version: sha256:a51348fdd01930ed3a637f0673bcfbb0e39fc86a79b78ce7c46e6fc8473f2cc5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following table provides a summary for determining whether costs to treat environmental contamination should be capitalized or charged to expense. - ![](https://asc.understandingaccounting.org/asc-img/GUID-77E76A25-182C-4E38-8770-7EC30590D7AD-low.gif) "Environmental Contamination, Treatments" Evaluation of Criteria Water Well Contamination Caused by Chemicals That Leaked into Wells Containing Water That Will Be Used in Future Beer Production: A. Neutralize water in wells "1. The treatment does not extend the life of the wells, increase their capacity, or improve efficiency. The condition of the water is not safer after the treatment compared to when the wells were initially acquired." "2. By neutralizing the water, the possibility of future contamination of the wells from future operations has not been mitigated or prevented." Conclusion: Costs incurred to neutralize well water should be charged to expense unless the wells were held for sale and the costs were incurred to prepare the wells for sale. B. Install water filters 1. The water filters improve the safety of the wells compared with their uncontaminated state when built or acquired. "2. The water filters address future problems that may result from future operations. Since the water filters are effective in filtering environmental contamination, they mitigate the effect of spilling new contaminants into the wells during future operations. In addition, the water filters represent an improvement compared with the wells' original condition without water filters." Conclusion: The water filtering system may be capitalized under either the first or the second criterion. ##### [410-30-55-25](https://asc.understandingaccounting.org/asc/410/30/#410-30-55-25) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:44.319Z to 2026-09-10T00:21:44.319Z Record version: sha256:01a420b3d1e29574733332a614578e4ff93527ba33d9094a139046d4d2611b9c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following table provides a summary for determining whether costs to treat environmental contamination should be capitalized or charged to expense. - ![](https://asc.understandingaccounting.org/asc-img/GUID-141702FC-2F92-441B-AEB2-0CD6CB155267-low.gif) "Environmental Contamination, Treatments" Evaluation of Criteria Underground Gasoline Storage Tanks Leak and Contaminate the Company's Property: A. Refine soil "1. Soil refinement does not extend the useful life, increase the capacity, or improve the efficiency or safety of the land relative to its unpolluted state when acquired." "2. By refining the contaminated soil, the oil company has addressed an existing problem. However, the company has not mitigated or prevented future leaks during future operations." Conclusion: Soil refining costs should be charged to expense unless the property is currently held for sale and the costs were incurred to prepare the property for sale. B. Encase tanks so as to prevent future leaks from contaminating surrounding soil "1. In some cases, encasement may increase the life of the tanks because of their increased resistance to corrosion, leaking, etc. In other situations, the treatment may not increase the life of the tanks. However, the encasement has improved the tanks' safety compared with their condition when built or acquired." "2. Encasement has mitigated or prevented future leakage and soil contamination that might otherwise result from future operations. In addition, the encasement has improved the tanks' safety compared with their condition when built or acquired." Conclusion: The cost of encasement may be capitalized under either the first or the second criterion. ##### [410-30-55-26](https://asc.understandingaccounting.org/asc/410/30/#410-30-55-26) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:44.319Z to 2026-09-10T00:21:44.319Z Record version: sha256:feb8fd8880e02710f6e98f22e7e7b443a8545b4b5c9be45bd8640a4bbd95ae69 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following table provides a summary for determining whether costs to treat environmental contamination should be capitalized or charged to expense. - ![](https://asc.understandingaccounting.org/asc-img/GUID-12702794-D3EF-451C-954A-75998ED7E0A3-low.gif) "Environmental Contamination, Treatments" Evaluation of Criteria Air in Office Building Contaminated with Asbestos Fibers: A. Remove asbestos 1. Removal of the asbestos improves the building's safety over its original condition since the environmental contamination (asbestos) existed when the building was constructed or acquired. "2. By removing the asbestos, the building's owner has eliminated an existing problem and has prevented any further contamination from that asbestos. However, by removing the existing asbestos, the building's owner has not mitigated or prevented new environmental problems, if any, that might result from future operation of the building." Conclusion: Asbestos removal costs may be capitalized as a betterment under the first criterion. ##### [410-30-55-27](https://asc.understandingaccounting.org/asc/410/30/#410-30-55-27) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:44.319Z to 2026-09-10T00:21:44.319Z Record version: sha256:7cf05d329ee7729a9ef72122fa3acbbb787991b434cfa62efd8b753e4069b420 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the application of the recognition and measurement guidance provided in Sections 410-30-25 and 410-30-30; it does not illustrate all disclosure requirements set forth in this Subtopic. ##### [410-30-55-28](https://asc.understandingaccounting.org/asc/410/30/#410-30-55-28) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:44.319Z to 2026-09-10T00:21:44.319Z Record version: sha256:0c606a5e6185c40c19f8a6f70b62ec2e483ae617535334ef8109c876478adcaa Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Prior to 1980, the XYZ Manufacturing Company contracted with a state-licensed waste hauling contractor to remove specified, nonhazardous solid and liquid industrial waste from one of its plants for disposal off-site at a state-licensed disposal facility. A purchase order was let, and the work was performed. The contractor complied with all applicable laws and regulations, and monthly reports were filed with appropriate state environmental agencies. ##### [410-30-55-29](https://asc.understandingaccounting.org/asc/410/30/#410-30-55-29) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:44.319Z to 2026-09-10T00:21:44.319Z Record version: sha256:e230ea093d366c4cf9595300c9bf6d91b44f9a6f0ccbeeb758b1fe7fa2fa20a9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In 1986, the entity received an information request from the Environmental Protection Agency pursuant to section 104 of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980. The information request stated that the Environmental Protection Agency believed that hazardous substances at a site, now listed by the Environmental Protection Agency on its National Priorities List, were generated at XYZ's plant. XYZ was named as a potentially responsible party and was directed by the Environmental Protection Agency, under penalty of law, to search its records exhaustively and answer a series of questions possibly implicating it directly to the site, or indirectly by its having used one or more transporters the Environmental Protection Agency said it was also investigating. ##### [410-30-55-30](https://asc.understandingaccounting.org/asc/410/30/#410-30-55-30) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:44.319Z to 2026-09-10T00:21:44.319Z Record version: sha256:836683f8dbd80c9aced449933ff2317f64017262d5536ce8f549f760f033ea1a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. XYZ searched its records as directed and determined late in 1986 that it had, in fact, contributed hazardous substances to the site. XYZ could not, however, determine how significant the hazardous substances it had sent to the site were in relation to the total population of hazardous substances at the site. The minimum remediation cost, including a minimum amount of legal fees, that XYZ was able to estimate was not material to its financial statements. XYZ was able, however, to determine that it was reasonably possible that its ultimate liability could be material. ##### [410-30-55-31](https://asc.understandingaccounting.org/asc/410/30/#410-30-55-31) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:44.319Z to 2026-09-10T00:21:44.319Z Record version: sha256:86968cb3cbb4350db18d47555e59f785995ad1fa477c4cb1050dadfdc10ab70c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In 1987 the Environmental Protection Agency identified a number of waste generators, transporters, and site owner-operators as likely potentially responsible parties. The identified potentially responsible parties were invited to a meeting at which government lawyers requested that one or more of the potentially responsible parties voluntarily perform a remedial investigation-feasibility study to evaluate existing site conditions (including a public health and ecological risk assessment) and to develop a proposed array of remedial alternatives from which the Environmental Protection Agency would select a remedy and demand that it be implemented. Standardized Environmental Protection Agency terms and conditions, stipulated penalty provisions, and indeterminate scope of work elements inhibited voluntary agreement among the potentially responsible parties, and so a [consent decree](https://asc.understandingaccounting.org/glossary/c/#consent-decree "A legal document, approved by a judge, that formalizes an agreement reached between the Environmental Protection Agency and potentially responsible parties through which potentially responsible parties will conduct all or part of a remedial action at a Superfund site; cease or correct actions or processes that are polluting the environment; or otherwise comply with regulations where potentially responsible parties' failure to comply caused the Environmental Protection Agency to initiate regulatory enforcement actions. The consent decree describes the actions potentially responsible parties will take and may be subject to a public comment period.") was not achieved. ##### [410-30-55-32](https://asc.understandingaccounting.org/asc/410/30/#410-30-55-32) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:44.319Z to 2026-09-10T00:21:44.319Z Record version: sha256:b838b14b0e5e6b865422b91c84101db48c19dfcee162e32803f7b1b3baee36a7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In 1988 the Environmental Protection Agency asserted the existence of "imminent and substantial endangerment" at the site early in 1988 under section 106 of the Comprehensive Environmental Response, Compensation, and Liability Act, and it issued a [unilateral administrative order](https://asc.understandingaccounting.org/glossary/u/#unilateral-administrative-order "Order issued unilaterally by the Environmental Protection Agency under section 106(a) of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 to potentially responsible parties, or to nonpotentially responsible parties such as adjacent landowners, requiring them to take a response action. Unilateral administrative orders contain findings of fact and conclusions of law, and they specify the work to be performed and the Environmental Protection Agency's right to take over the work in the event of noncompliance, inadequate performance, or an emergency. A unilateral administrative order does not allocate conduct required by the order between individual potentially responsible parties; however, the Environmental Protection Agency may issue carve-out orders requiring individual potentially responsible parties to perform specific actions. Also referred to as a section 106 order.") to the potentially responsible party with the deepest pockets—XYZ—to undertake the remedial investigation-feasibility study. ##### [410-30-55-33](https://asc.understandingaccounting.org/asc/410/30/#410-30-55-33) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:44.319Z to 2026-09-10T00:21:44.319Z Record version: sha256:b2236694759a85e5adafae224944db0bd2e226eda4d99ceab5a1cc9a483ded60 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Because triple damages are authorized under section 106 of the Comprehensive Environmental Response, Compensation, and Liability Act, XYZ agreed to conduct the remedial investigation-feasibility study specified in the order and demanded that other identified potentially responsible parties participate in the effort. XYZ initially estimated the cost that would be incurred to perform the remedial investigation-feasibility study to be between $1 million and $2 million. Based on the limited information that was available about the site, information that XYZ had about its contribution to the site, and the number and financial condition of other potentially responsible parties, XYZ initially estimated that its ultimate share of this cost would prove to be in the range of 20 percent to 50 percent. XYZ also estimated that it would incur legal costs related to the remediation effort of $200,000 to $2 million in addition to any legal costs that might be incurred by any potentially responsible party group that might be formed. No amounts within any of these ranges were considered to be better estimates than any other amounts within any of these ranges. Because of a lack of information about the type and extent of the remediation effort that could be required, no range of cost of the overall remediation effort could be developed at this time. ##### [410-30-55-34](https://asc.understandingaccounting.org/asc/410/30/#410-30-55-34) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:44.319Z to 2026-09-10T00:21:44.319Z Record version: sha256:1915dc2a1cad20f4fc97ce0842f96375e6c629a5edd24fface8f2c8eb9513bf2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Under threat of a contribution lawsuit by XYZ, a potentially responsible party group was formed late in 1988. The potentially responsible party group had the following three objectives: 1. a To implement the requirements of the unilateral administrative order in the most cost-effective and scientifically valid way 2. b To raise money and allocate costs among the potentially responsible parties willing to perform the work based on the types and relative quantities of wastes shipped to the site or another agreed-upon formula 3. c To recover costs from nonparticipating potentially responsible parties, if possible. ##### [410-30-55-35](https://asc.understandingaccounting.org/asc/410/30/#410-30-55-35) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:44.319Z to 2026-09-10T00:21:44.319Z Record version: sha256:18d5921923b9871dd79b3cacc3935d24d98c77536db7cee2a0e19ed4c2eba6d0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Because of the lack of a good data base of factual information upon which to make sound allocation decisions agreeable to all, outside arbitration was used in 1989 to allocate fair share costs among participating potentially responsible parties. The arbitrator preliminarily apportioned 65 percent of the costs for the site to the four participating potentially responsible parties, as follows. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-906E4D43-3AD4-4BE7-A9B8-713A224D9A14-low.gif) XYZ 20% Potentially responsible party No. 2 20 Potentially responsible party No. 3 15 Potentially responsible party No. 4 10 65% Orphan share 25 Recalcitrant share 10 100% ##### [410-30-55-36](https://asc.understandingaccounting.org/asc/410/30/#410-30-55-36) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:44.319Z to 2026-09-10T00:21:44.319Z Record version: sha256:64a8c2a97a9329a86f1fda0c1e3d00c76f8705555222657081240659b98811cb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Twenty-five percent of the site was determined to be the [orphan share](https://asc.understandingaccounting.org/glossary/o/#orphan-share "Equitable share of liability for response or remediation costs attributed to orphan-share potentially responsible parties, or the amount by which the equitable share of liability for response or remediation costs attributable to other parties exceeds the amount for which those parties have settled their liability."), for which no potentially responsible party could be identified. Ten percent was attributed to two recalcitrant (nonparticipating) potentially responsible parties, and there was insufficient information to overcome the presumption that costs will be allocated only among the participating potentially responsible parties. ##### [410-30-55-37](https://asc.understandingaccounting.org/asc/410/30/#410-30-55-37) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:44.319Z to 2026-09-10T00:21:44.319Z Record version: sha256:d9ac9db6c11f1b79cba868afd1e5e0cb53ce639995937b03578a611682b510dd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. XYZ gained some understanding of the other participating potentially responsible parties' financial condition and believed each of them was able and likely to pay its full share of the costs of the remedial investigation-feasibility study. XYZ was concerned, however, about the ability of potentially responsible party No. 3 to pay its full share of the cost of the overall remediation effort. ##### [410-30-55-38](https://asc.understandingaccounting.org/asc/410/30/#410-30-55-38) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:44.319Z to 2026-09-10T00:21:44.319Z Record version: sha256:34de6882ab39773ef6e252deeadb712fbd058845e1d05fbd8ca7e0fb8a59a295 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Based on the amount already spent on legal costs and the results of potentially responsible party organization efforts, XYZ determined that $350,000 was the best estimate of its separate legal costs. The estimate of the costs that will be incurred to perform the remedial investigation-feasibility study, which now included group administration costs, now stood at $1.2 million to $2.2 million. ##### [410-30-55-39](https://asc.understandingaccounting.org/asc/410/30/#410-30-55-39) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:44.319Z to 2026-09-10T00:21:44.319Z Record version: sha256:c607ab8a70d884f6aaf057b916b7b9f771a1dc9e08022bf7800879f81c95ec44 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The remedial investigation-feasibility study was substantially completed in 1991. No changes were made to the potentially responsible parties allocation percentages as a result of the remedial investigation-feasibility study completion. The potentially responsible party group's initial estimate of the cost of implementing the remedy expected to be required by the Environmental Protection Agency was $25 million to $30 million. No amount within this range was considered to be a better estimate than any other amount within the range. This estimate included estimates of the cost of all elements of the remediation effort, including common legal, engineering, construction, monitoring, operation and maintenance costs (including postremediation monitoring for a period of 30 years), and so forth. ##### [410-30-55-40](https://asc.understandingaccounting.org/asc/410/30/#410-30-55-40) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:44.319Z to 2026-09-10T00:21:44.319Z Record version: sha256:a0544a4b5f794a357910bc5f332ee978fc856d3997f30a4c0375235972d06014 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. XYZ believed that potentially responsible party No. 2 and potentially responsible party No. 4 could and would pay their full shares of the cost of the remediation effort. Potentially responsible party No. 3, however, indicated that, because of its deteriorating financial position, it would likely be unable to pay more than two-thirds of its 15 percent share and none of its allocated amount attributed to the orphan and recalcitrant shares, or 10 percent of those costs. XYZ shared potentially responsible party No. 3's views about potentially responsible party No. 3's ability to pay. ##### [410-30-55-41](https://asc.understandingaccounting.org/asc/410/30/#410-30-55-41) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:44.319Z to 2026-09-10T00:21:44.319Z Record version: sha256:bfeaac056a66308019b43772b377c9d14854904c2fb5efd13d0d01d6038ca2eb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Three years after site studies began, the Environmental Protection Agency and its outside contractors evaluated the reports submitted under the terms of the unilateral administrative order. A record of decision was issued by the Environmental Protection Agency on September 30, 1992, in which remedial actions based on the remedial investigation-feasibility study were selected and cost estimates were presented. The potentially responsible parties were requested to voluntarily implement the record of decision and again sign up to the terms demanded by the government. No preenforcement federal court review is permitted, even if the remedy specified in the record of decision is scientifically flawed, unattainable by available, proven technology, non-cost-effective, or open-ended. The potentially responsible parties had the following choices: perform the remedy specified in the record of decision voluntarily, or refuse to do work, in which case the Environmental Protection Agency would either issue another unilateral administrative order or perform the work using its contractor procurement systems and sue the potentially responsible parties for cost recovery. The potentially responsible parties agreed to perform the remedy specified in the record of decision and entered into a consent judgment. ##### [410-30-55-42](https://asc.understandingaccounting.org/asc/410/30/#410-30-55-42) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:44.319Z to 2026-09-10T00:21:44.319Z Record version: sha256:08d845e53b904fd5a4be206ba489374c9bebe2d5254d44ab44f25f8dd01dd581 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Note that the law requires the Environmental Protection Agency to review the record of decision and remedy within five years of its implementation by the potentially responsible parties. If the objectives of the record of decision have not been attained, the Environmental Protection Agency may make additional demands on the potentially responsible parties. If one or more potentially responsible parties believe they have paid a disproportionate share of the costs, they may track down other potentially responsible parties and sue them in a contribution action. Although requests for reimbursement from Superfund can also be made for allocations attributed to unidentified or unknown parties (the orphan share) under certain conditions, this is not usually allowed by terms and conditions of consent order settlements withthe Environmental Protection Agency. ##### [410-30-55-43](https://asc.understandingaccounting.org/asc/410/30/#410-30-55-43) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:44.319Z to 2026-09-10T00:21:44.319Z Record version: sha256:704ae782ac2dfd896fd6b26639e40bffede0b1443907afee0ca0cc2d414591a6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Subtopic 450-20 requires accrual of a loss contingency when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Receipt in 1986 of an information request did not establish that a liability was probable because, notwithstanding the Environmental Protection Agency's interest in XYZ's connection, if any, to the site, it had not been established that XYZ was in fact associated with the site. As noted in paragraph [410-30-25-4](https://asc.understandingaccounting.org/asc/410/30/#410-30-25-4), however, receipt of notification that an entity may be a potentially responsible party compels the entity to action. ##### [410-30-55-44](https://asc.understandingaccounting.org/asc/410/30/#410-30-55-44) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:44.319Z to 2026-09-10T00:21:44.319Z Record version: sha256:e149fdd1f990628df2579b40a9b6c6fd2ad6e5c81872c7c867ba32b9ad38e71e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. When XYZ determined late in 1986 that it had, in fact, contributed hazardous substances to the site, the liability became probable. The criteria for recognition had not yet been met, however, because XYZ did not have sufficient information to reasonably estimate a minimum amount in the range of its liability that would be material to its financial statements. Disclosure of the nature of the contingency and a statement that an estimate of the loss or range of loss cannot be made was required under Subtopic 450-20. ##### [410-30-55-45](https://asc.understandingaccounting.org/asc/410/30/#410-30-55-45) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:44.319Z to 2026-09-10T00:21:44.319Z Record version: sha256:8d5f15b5991fa2cb923d72b312d97f41539a73a43d4661417b65c16c6cede199 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. During 1987, little additional information that would aid XYZ in making an estimate of the loss or range of loss became available. Therefore, the accounting and disclosure for the contingent loss related to the remediation liability remained the same. ##### [410-30-55-46](https://asc.understandingaccounting.org/asc/410/30/#410-30-55-46) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:44.319Z to 2026-09-10T00:21:44.319Z Record version: sha256:8d298d1a6b5abf70c6439123dee1ef373de57aff7783b4ad72ccb01d3c0cc3bd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In 1988, when XYZ agreed to perform a remedial investigation-feasibility study in accordance with the Environmental Protection Agency's unilateral administrative order and the potentially responsible party group was formed, XYZ should have recorded a liability of $400,000, computed as follows. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-4E92250A-9415-4F43-B6FC-441714D52508-low.gif) "XYZ's estimated share of the minimum amount in the range of the estimated cost of the remedial investigation-feasibility study \[20 percent of $1,000,000\]" " $200,000 " XYZ's minimum estimate of its legal costs " 200,000 " " $400,000 " ##### [410-30-55-47](https://asc.understandingaccounting.org/asc/410/30/#410-30-55-47) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:44.319Z to 2026-09-10T00:21:44.319Z Record version: sha256:7613bb8f92b2d0712ac62e6236a78b715378ea15af924d86fac1706b3131ac8e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Because other potentially responsible parties had agreed during 1988 to participate in the remedial investigation-feasibility study effort, they are considered to be participating potentially responsible parties. Neither the fact that the unilateral administrative order named only XYZ nor the fact that a preliminary cost-sharing formula had not yet been determined by the arbitrator should have required XYZ to accrue more than its estimated allocable share of the minimum estimated liability. ##### [410-30-55-48](https://asc.understandingaccounting.org/asc/410/30/#410-30-55-48) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:44.319Z to 2026-09-10T00:21:44.319Z Record version: sha256:b71e5a90300e6751094be72b5ad94d4ffde3301a31ecfe043b0575330c35e970 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Although no recognition benchmarks were achieved in 1989 or 1990, XYZ should have refined its estimate of its liability as additional significant information became available. For example, in 1989, when the preliminary cost-sharing formula was developed by the arbitrator and the estimate of the cost of the remedial investigation-feasibility study was revised, XYZ should have refined its estimate of its share of the cost of the remedial investigation-feasibility study and adjusted its liability to $719,231, less any amounts already expended. $719,231 is computed as follows. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-7EB32C51-28E2-43BD-B921-C89A1B05BABE-low.gif) XYZ's allocable share of the minimum amount in the range of the estimated cost of the remedial investigation-feasibility study \[20 percent of $1.2 million\] " $240,000 " XYZ's pro rata share of amounts allocable to other parties but that are not expected to be paid by those other parties \[20/65 of 35 percent of $1.2 million\] " 129,231 " XYZ's estimated legal costs " 350,000 " " $719,231 " ##### [410-30-55-49](https://asc.understandingaccounting.org/asc/410/30/#410-30-55-49) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:44.319Z to 2026-09-10T00:21:44.319Z Record version: sha256:643b75c619bfeefeb11938e3e7391032bcb87f45df293e5851222313b8923985 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. By the time the feasibility study was substantially completed in 1991, XYZ should have adjusted its liability to reflect its estimated share of the minimum amount of the overall remediation liability. Based on the facts presented, this amount should be $9,350,000, less any amounts already expended. $9,350,000 is computed as follows. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-C06E5952-9D5E-495C-B1AA-CA2E6780E5A8-low.gif) 20% of $25 million " $5,000,000 " 20/65 of 35 percent of $25 million " 2,692,308 " 20/50 of amount allocable to potentially responsible party No. 3 that is not expected to be paid by potentially responsible party No. 3 \[20/50 of 5 percent of $25 million plus 20/50 of 15/65 of 35 percent of $25 million\] " 1,307,692 " Estimated legal costs " 350,000 " " $9,350,000 " ##### [410-30-55-50](https://asc.understandingaccounting.org/asc/410/30/#410-30-55-50) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:44.319Z to 2026-09-10T00:21:44.319Z Record version: sha256:f98d6f3abe164def6a6b909117eb49aa8c005c508d1a26a745d80adb98b36026 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The estimate of the environmental remediation liability should be further refined when the record of decision is issued in 1992 and at various other points when additional information becomes available. ##### [410-30-55-51](https://asc.understandingaccounting.org/asc/410/30/#410-30-55-51) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:44.319Z to 2026-09-10T00:21:44.319Z Record version: sha256:330e2caa89016f4b8fcc400967c5fa163968548cd377de4cd3c88fdc1a23be80 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The measurement of the remediation liability should not have been discounted at any point during the period under discussion because the amount of the obligation and the amount and timing of cash payments were not fixed or reliably determinable. Source downloaded (UTC): 2026-09-10T00:21:50.107Z to 2026-09-10T00:21:50.107Z Record version: sha256:64a0adc4af6f1e8126c06523fa90b692da177db1dbd7610da2e389efff3a28ff Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 410-30-S00: SEC 00 Status [Read section](https://asc.understandingaccounting.org/asc/410/30/#sec-00-status) SEC content: yes ##### [410-30-S00-1](https://asc.understandingaccounting.org/asc/410/30/#410-30-S00-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:50.107Z to 2026-09-10T00:21:50.107Z Record version: sha256:335af945eedfeb3eee37eec75ea31365c33ab466cf68b11d57d0e2ef3d67468e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following table identifies the changes made to this Subtopic.
ParagraphActionAccounting Standards UpdateDate
410-30-S35-1AddedAccounting Standards Update No. 2009-0709/15/2009
Source downloaded (UTC): 2026-09-10T00:21:52.022Z to 2026-09-10T00:21:52.022Z Record version: sha256:5bd3512b7e9c8a38d67d19912e780f46917c4fa9f31a6001855d86f3ca595b43 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 410-30-S30: SEC 30 Initial Measurement [Read section](https://asc.understandingaccounting.org/asc/410/30/#sec-30-initial-measurement) SEC content: yes #### Appropriate Discount Rate to Be Applied to a Product or Environmental Remediation Liability ##### [410-30-S30-1](https://asc.understandingaccounting.org/asc/410/30/#410-30-S30-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:52.022Z to 2026-09-10T00:21:52.022Z Record version: sha256:4a7b837d1e222f501498dd110449cc3f68e93965f497c9e00ff822cffba32acd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [450-20-S99-1](https://asc.understandingaccounting.org/asc/450/20/#450-20-S99-1), SAB Topic 5.Y, Question 1, for SEC Staff views on the discount rate to be used in measuring product or environmental remediation liabilities. Source downloaded (UTC): 2026-09-10T00:21:55.601Z to 2026-09-10T00:21:55.601Z Record version: sha256:bf95c8077bf7b49f53b633e91554d78151bb48ed33a1063f46a8319dcdda9c87 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 410-30-S35: SEC 35 Subsequent Measurement [Read section](https://asc.understandingaccounting.org/asc/410/30/#sec-35-subsequent-measurement) SEC content: yes #### Appropriate Discount Rate to Be Applied to a Product or Environmental Remediation Liability ##### [410-30-S35-1](https://asc.understandingaccounting.org/asc/410/30/#410-30-S35-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:55.601Z to 2026-09-10T00:21:55.601Z Record version: sha256:8213f2a9064591c850e519a6cf5d56aadf58655787b9020a06958fda9c224931 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [450-20-S99-1](https://asc.understandingaccounting.org/asc/450/20/#450-20-S99-1), SAB Topic 5.Y, Accounting and Disclosures Relating to Loss Contingencies, Question 1. Source downloaded (UTC): 2026-09-10T00:21:58.125Z to 2026-09-10T00:21:58.125Z Record version: sha256:68ff935db4c0995880a581ec1e1a6eff6480d17884fe4c4192db4665df73d52f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 410-30-S50: SEC 50 Disclosure [Read section](https://asc.understandingaccounting.org/asc/410/30/#sec-50-disclosure) SEC content: yes #### Disclosures Related to Discounting an Environmental Liability ##### [410-30-S50-1](https://asc.understandingaccounting.org/asc/410/30/#410-30-S50-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:58.125Z to 2026-09-10T00:21:58.125Z Record version: sha256:4e1f3bac15e8587aaf0524d1cb0e92a24e0d62cc81fde438ea49f34433e63be5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [450-20-S99-1](https://asc.understandingaccounting.org/asc/450/20/#450-20-S99-1), SAB Topic 5.Y, Question 1, for SEC Staff views on disclosure requirements if an environmental remediation liability is recognized on a discounted basis. #### Disclosure Related to Loss Contingencies ##### [410-30-S50-2](https://asc.understandingaccounting.org/asc/410/30/#410-30-S50-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:58.125Z to 2026-09-10T00:21:58.125Z Record version: sha256:276d92160051eeee3cb43096c4072c9f222c3c56c04c3a18d8a22d933f611982 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [450-20-S99-1](https://asc.understandingaccounting.org/asc/450/20/#450-20-S99-1), SAB Topic 5.Y, Question 2, for SEC Staff views on the financial statement disclosures that should be furnished with respect to product and environmental remediation liabilities. #### Disclosures Related to Remediation Costs ##### [410-30-S50-3](https://asc.understandingaccounting.org/asc/410/30/#410-30-S50-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:21:58.125Z to 2026-09-10T00:21:58.125Z Record version: sha256:27cf66060ccb36e63cf707c8137212187b9363c4a354a0df74662c65b6dac302 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [450-20-S99-1](https://asc.understandingaccounting.org/asc/450/20/#450-20-S99-1), SAB Topic 5.Y, Question 4, for SEC Staff views on disclosures pertaining to site restoration costs and other environmental remediation costs. Source downloaded (UTC): 2026-09-10T00:22:01.250Z to 2026-09-10T00:22:29.648Z Record version: sha256:8e1582ea9fc31fe15e4b98d44ed14ce080fe86e27df95570de7b946c5c1085e4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 410-980: Asset Retirement and Environmental Obligations — Regulated Operations ### Machine-generated study aids ```json { "summary": "ASC 410-980 explains how rate-regulated entities apply the asset retirement obligation (ARO) model of Subtopic 410-20. Because rate regulation may allow recovery of retirement costs on a timing pattern different from GAAP ARO cost recognition, a regulated entity that meets the requirements of Topic 980 recognizes a regulatory asset or regulatory liability for that timing difference. Capitalized asset retirement cost is included in long-lived asset impairment testing on the same basis as for any other entity.", "key_points": [ "Nuclear plant decommissioning costs are incurred costs imposed by regulation or statute (similar to the obligation to restore land after strip mining), so paragraph 980-405-25-1(b) does not address those costs (410-980-25-1).", "Rate-regulated entities may recover retirement costs in customer rates on a timing pattern that differs from period cost recognition under Subtopic 410-20, and a timing difference can also arise when retirement costs are included in amounts charged to customers but no liability is recognized (410-980-25-2).", "If the requirements of Topic 980 are met, the regulated entity recognizes a regulatory asset or regulatory liability for the difference between financial reporting recognition of ARO period costs and rate-making recognition (410-980-25-2).", "Some retirement costs recovered in rates arise from AROs within the scope of Subtopic 410-20 and others do not; only the former follow that Subtopic (410-980-25-2).", "The capitalized amount of an asset retirement cost is included in the impairment assessment of a rate-regulated entity's long-lived assets just as for any other entity (410-980-35-1).", "Subtopic 980-360 applies to the asset retirement cost related to a rate-regulated long-lived asset that has been closed or abandoned (410-980-35-1).", "The Subtopic follows the same scope and scope exceptions as Section 980-10-15 (410-980-15-1)." ], "categories": [ "Recognition", "Impairment", "Industry-specific", "Subsequent measurement" ], "audience_level": "intermediate", "student_note": "This is the bridge between the ARO model and rate regulation: utilities still record AROs under 410-20 for financial reporting, and the rate-recovery mismatch is resolved through a regulatory asset or liability rather than by deferring the ARO itself. A common error is assuming that because decommissioning costs are collected in rates, no ARO liability or no impairment testing of the capitalized retirement cost is needed.", "related_topics": [ "410-20", "980-10", "980-340", "980-360", "980-405" ], "key_concepts": [ "asset retirement obligation", "rate-regulated operations", "regulatory asset", "regulatory liability", "nuclear plant decommissioning costs", "asset retirement cost", "recovery through customer rates", "abandoned plant" ] } ``` Source downloaded (UTC): 2026-09-10T00:22:01.250Z to 2026-09-10T00:22:01.250Z Record version: sha256:52ab8a4604fb23f7dc3c4afb5b7fd93fc20c6338869b9bea4c809af1bd8af9d9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 410-980-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/410/980/#05-overview-and-background) SEC content: no ##### [410-980-05-1](https://asc.understandingaccounting.org/asc/410/980/#410-980-05-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:22:01.250Z to 2026-09-10T00:22:01.250Z Record version: sha256:a5eca23abe617dc2e15710970a463a030f26a1829d721138184558a4651590ef Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic provides guidance for asset retirement obligations for entities with regulated operations. Source downloaded (UTC): 2026-09-10T00:22:04.135Z to 2026-09-10T00:22:04.135Z Record version: sha256:859d0e75cb96e6849338c2759f1dc34107d99f609a2bdebeb04f13235e2a507b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 410-980-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/410/980/#15-scope-and-scope-exceptions) SEC content: no #### Overall Guidance ##### [410-980-15-1](https://asc.understandingaccounting.org/asc/410/980/#410-980-15-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:22:04.135Z to 2026-09-10T00:22:04.135Z Record version: sha256:23afdb3253cdac8bab489d2dc29cbd9fc50049b91574e7aa03854f7a989f4f59 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 980-10-15. Source downloaded (UTC): 2026-09-10T00:22:07.259Z to 2026-09-10T00:22:07.259Z Record version: sha256:3712fbe4dac214766f983a779ffb1f3b16a05b711c48fb7cab427e9be501dcab Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 410-980-25: 25 Recognition [Read section](https://asc.understandingaccounting.org/asc/410/980/#25-recognition) SEC content: no #### Decommissioning Costs ##### [410-980-25-1](https://asc.understandingaccounting.org/asc/410/980/#410-980-25-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:22:07.259Z to 2026-09-10T00:22:07.259Z Record version: sha256:4933fb05a4c0d5da3354d11a6ae0ab71216bb03b880819b6060e7a3bf2ac18fb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Nuclear plant decommissioning costs are incurred costs in the current accounting framework. Those costs and the related liabilities are imposed by regulation or statute, similar to the liability to restore the land after strip mining. Accordingly, paragraph [980-405-25-1(b)](https://asc.understandingaccounting.org/asc/405/980/#405-980-25-1) does not address those costs. #### Costs from Asset Retirement Obligations ##### [410-980-25-2](https://asc.understandingaccounting.org/asc/410/980/#410-980-25-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:22:07.259Z to 2026-09-10T00:22:07.259Z Record version: sha256:3cd552ee85893214ea7f8bdd8dcb041ec86f65ba0b395d613b368cece6818cb9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Many rate-regulated entities currently provide for the costs related to the retirement of certain long-lived assets in their financial statements and recover those amounts in rates charged to their customers. Some of those costs result from asset retirement obligations within the scope of Subtopic 410-20; others result from costs that are not within the scope of that Subtopic. The amounts charged to customers for the costs related to the retirement of long-lived assets may differ from the period costs recognized in accordance with that Subtopic and, therefore, may result in a difference in the timing of recognition of period costs for financial reporting and rate-making purposes. An additional recognition timing difference may exist when the costs related to the retirement of long-lived assets are included in amounts charged to customers but liabilities are not recognized in the financial statements. If the requirements of this Topic are met, a regulated entity also shall recognize a regulatory asset or liability for differences in the timing of recognition of the period costs associated with asset retirement obligations for financial reporting pursuant to that Subtopic and rate-making purposes. Source downloaded (UTC): 2026-09-10T00:22:09.348Z to 2026-09-10T00:22:09.348Z Record version: sha256:614017095d7cd9471ceb57f0355bdf2ff1c6c9e9f4e9ec254d686b33c0e9266d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 410-980-35: 35 Subsequent Measurement [Read section](https://asc.understandingaccounting.org/asc/410/980/#35-subsequent-measurement) SEC content: no ##### [410-980-35-1](https://asc.understandingaccounting.org/asc/410/980/#410-980-35-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:22:09.348Z to 2026-09-10T00:22:09.348Z Record version: sha256:429fd4061acb36b4ce620ad7e1587391c2e91507beeb8fb2aa2a04d0400d3c00 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The capitalized amount of an asset retirement cost shall be included in the assessment of impairment of long-lived assets of a rate-regulated entity just as that cost is included in the assessment of impairment of long-lived assets of any other entity. Subtopic 980-360 applies to the asset retirement cost related to a long-lived asset of a rate-regulated entity that has been closed or abandoned. Source downloaded (UTC): 2026-09-10T00:22:16.106Z to 2026-09-10T00:22:16.106Z Record version: sha256:0a42963e7f7c99c38c6f4c5dab8679ce818dcf5de7a30b9f9cace45fc3ab71fb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 410-980-S00: SEC 00 Status [Read section](https://asc.understandingaccounting.org/asc/410/980/#sec-00-status) SEC content: yes ##### [410-980-S00-1](https://asc.understandingaccounting.org/asc/410/980/#410-980-S00-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:22:16.106Z to 2026-09-10T00:22:16.106Z Record version: sha256:ba711627021029aea135703ac1530acd21d7ecaadcecae861b7c9b27d191645e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following table identifies the changes made to this Subtopic.
ParagraphActionAccounting Standards UpdateDate
980-410-S99-1AmendedAccounting Standards Update No. 2009-0308/24/2009
Source downloaded (UTC): 2026-09-10T00:22:18.692Z to 2026-09-10T00:22:18.692Z Record version: sha256:9f2e066caed1d709d32f6e1951308c102d624864f8d20e8dca3ede0bdccb4c48 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 410-980-S25: SEC 25 Recognition [Read section](https://asc.understandingaccounting.org/asc/410/980/#sec-25-recognition) SEC content: yes #### Environmental Remediation Liabilities ##### [410-980-S25-1](https://asc.understandingaccounting.org/asc/410/980/#410-980-S25-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:22:18.692Z to 2026-09-10T00:22:18.692Z Record version: sha256:aa1903c68815fe55d3ae6ec3d512a27b152194496d14327a9b8c44ca2ff76e26 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [980-410-S99-1](https://asc.understandingaccounting.org/asc/410/980/#410-980-S99-1), SAB Topic 10.F, Question 2, for SEC Staff views on the recognition of environmental remediation liabilities. Source downloaded (UTC): 2026-09-10T00:22:22.586Z to 2026-09-10T00:22:22.586Z Record version: sha256:28719f5585d46ef1ab9076c0d3397cd772ddda19074b3da2691e6ec3a221ae94 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 410-980-S45: SEC 45 Other Presentation Matters [Read section](https://asc.understandingaccounting.org/asc/410/980/#sec-45-other-presentation-matters) SEC content: yes #### Presentation of Liabilities for Environmental Costs ##### [410-980-S45-1](https://asc.understandingaccounting.org/asc/410/980/#410-980-S45-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:22:22.586Z to 2026-09-10T00:22:22.586Z Record version: sha256:e22a2525311571666416cd854f848bb04cfbb4b657d57cca12923987fb82d7d6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [980-410-S99-1](https://asc.understandingaccounting.org/asc/410/980/#410-980-S99-1), SAB Topic 10.F, Question 1, for SEC Staff views on the presentation of environmental remediation liabilities. Source downloaded (UTC): 2026-09-10T00:22:29.648Z to 2026-09-10T00:22:29.648Z Record version: sha256:95cd310ad4083203a7327a6feacf2f10c62542f8b08664a7f902be88dcf4fb0a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 410-980-S99: SEC 99 SEC Materials [Read section](https://asc.understandingaccounting.org/asc/410/980/#sec-99-sec-materials) SEC content: yes #### SEC Staff Guidance ##### [410-980-S99-1](https://asc.understandingaccounting.org/asc/410/980/#410-980-S99-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:22:29.648Z to 2026-09-10T00:22:29.648Z Record version: sha256:37af3da65c6d117e5980a58f8b64b7006165d1464526cea48d5885502c17737b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following is the text of SAB Topic 10.F, Presentation of Liabilities for Environmental Costs. - Facts: A public utility company determines that it is obligated to pay material amounts as a result of an environmental liability. These amounts may relate to, for example, damages attributed to clean-up of hazardous wastes, reclamation costs, fines, and litigation costs. - Question 1: May a rate-regulated enterprise present on its balance sheet the amount of its estimated liability for environmental costs net of probable future revenue resulting from the inclusion of such costs in allowable costs for rate-making purposes? - Interpretive Response: No. Statement 71 \[paragraph [980-340-25-1](https://asc.understandingaccounting.org/asc/340/980/#340-980-25-1)\] specifies the conditions under which rate actions of a regulator can provide reasonable assurance of the existence of an asset. The staff believes that environmental costs meeting the criteria of paragraph 9 FN6 of Statement 71 \[paragraph [980-340-25-1](https://asc.understandingaccounting.org/asc/340/980/#340-980-25-1)\] should be presented on the balance sheet as an asset and should not be offset against the liability. Contingent recoveries through rates that do not meet the criteria of paragraph 9 \[paragraph [980-340-25-1](https://asc.understandingaccounting.org/asc/340/980/#340-980-25-1)\] should not be recognized either as an asset or as a reduction of the probable liability. - FN6 Paragraph 9 of Statement 71 \[paragraph [980-340-25-1](https://asc.understandingaccounting.org/asc/340/980/#340-980-25-1)\] requires a rate-regulated enterprise to capitalize all or part of an incurred cost that would otherwise be charged to expense if it is probable that future revenue will be provided to recover the previously incurred cost from inclusion of the costs in allowable costs for rate-making purposes. - Question 2: May a rate-regulated enterprise delay recognition of a probable and estimable liability for environmental costs which it has incurred at the date of the latest balance sheet until the regulator's deliberations have proceeded to a point enabling management to determine whether this cost is likely to be included in allowable costs for rate-making purposes? - Interpretive Response: No. Statement 5 \[paragraph [450-20-25-2](https://asc.understandingaccounting.org/asc/450/20/#450-20-25-2)\] states that an estimated loss from a loss contingency shall be accrued by a charge to income if it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. FN7 The staff believes that actions of a regulator can affect whether an incurred cost is capitalized or expensed pursuant to Statement 71 \[paragraph [980-340-25-1](https://asc.understandingaccounting.org/asc/340/980/#340-980-25-1)\], but the regulator's actions cannot affect the timing of the recognition of the liability. - FN7 Registrants also should apply the guidance of SOP 96-1 \[Section 410-30-25\] in determining the appropriate recognition of environmental remediation costs.