Preface

We are pleased to present the 2024 edition of Environmental Obligations and Asset Retirement Obligations. The accounting for environmental obligations and asset retirement obligations (AROs) will vary depending on the laws and regulations governing such obligations. This Roadmap is intended to help entities address the impact of certain environmental and asset retirement laws and regulations on accounting for environmental obligations and AROs.

Environmental obligations are generally accounted for under ASC 410-30,1 whose recognition and disclosure guidance is principally based on the framework outlined by the guidance on loss contingencies in ASC 450-20. Because the guidance in ASC 410-30 addresses the application of federal and state environmental laws and regulations in the United States, this Roadmap provides an overview of some of those laws and regulations and describes the application of ASC 410-30 within the relevant legal framework.

AROs typically arise as a result of federal or state laws, contractual agreements, 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.

The 2024 edition of this Roadmap reflects relevant developments through May 17, 2024. For a summary of key changes made to this Roadmap since publication of the 2023 edition, see Appendix E.

Although this Roadmap is intended to be a helpful resource, it is not a substitute for consulting with Deloitte professionals and other advisers, such as legal counsel and environmental specialists, on complex questions and transactions related to matters discussed in the Roadmap.

We hope that you find this publication to be a valuable resource when considering the guidance on accounting for environmental obligations and AROs.