A Roadmap to Accounting for Environmental Obligations and Asset Retirement Obligations

This Roadmap provides Deloitte’s insights into and interpretations of the accounting guidance on environmental obligations in ASC 410-30 and asset retirement obligations (AROs) in ASC 410-20.

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Acknowledgments Preface Contacts Chapter 1 — Overview Chapter 2 — Environmental Regulations Chapter 3 — Accounting for Environmental Obligations Chapter 4 — Accounting for Asset Retirement Obligations Chapter 5 — Industry Considerations Related to Asset Retirement Obligations and Environmental Obligations Appendix A — Differences Between U.S. GAAP and IFRS Standards Appendix B — Environmental Literature Appendix C — Titles of Standards and Other Literature Appendix D — Abbreviations Appendix E — Changes Made in the 2020 Edition of This Publication

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.