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- US GAAP
The guidance on accounting for environmental obligations and asset retirement
obligations (AROs) is unique because of its dependency on the various laws and
regulations governing such obligations. Given that dependency, we have created this
Roadmap to illustrate and help you navigate the intersection of law and accounting
related to environmental obligations and AROs.
The accounting guidance on loss contingencies in ASC 450-20 provides the framework
for the accounting for environmental obligations under ASC 410-30. The accounting
requirements for environmental obligations under ASC 410-30 are generally based on
federal and state environmental laws in the United States. Accordingly, this Roadmap
provides an overview of some of the applicable state and federal environmental laws
in the United States and describes the application of the accounting guidance within
this legal framework.
Unlike environmental obligations, AROs typically arise as a result of state laws and
asset-specific operating permits. This Roadmap describes the accounting requirements
for AROs in ASC 410-20 and includes a discussion of certain relevant industry
considerations within the context of the laws and regulations governing AROs for
various industries.