Does GASB 49 affect your government? – GASB 49’s Requirements, Part 2

The pollution remediation costs your government must report in its annual financial statements may dramatically increase as a result of the Governmental Accounting Standards Board Statement No. 49, “Accounting and Financial Reporting for Pollution Remediation Obligations” (GASB 49). This four-part series will cover the requirements, potential liabilities and suggested operations that will help you implement these changes.

​To read Part 1 of this series, click here.

Below, in part 2, we'll show you simple guidelines and a template worksheet to identify whether your government might be affected by the GASB 49 requirements.

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Determine Whether Your Government Has Potential Liability

Does GASB 49 affect your government? If your government has polluted sites, form a work team composed of the individuals who are most knowledgeable about polluted sites, estimated costs to clean and monitor the sites, and legal or insurance claims and settlements that could offset those costs. The work team should collectively identify all polluted sites and compile such data as site description, location, regulatory actions taken to date, cleanup status, obligating events to date, and recognition benchmarks to date.

Below is an example of a worksheet used to document information about contaminated sites:
Download the sample worksheet in Word format here.

Here's what the work team should ensure:

• Meet periodically to review and update the status of the sites.
• Determine for each polluted site whether an obligating event has occurred.
• When an obligating event has occurred, recognition of a related liability is mandatory.
• Polluted sites that have not yet triggered obligating events should remain on the government’s list of polluted sites and be reviewed periodically to determine whether an obligating event occurs in the future. A liability should not be recognized prior to the occurrence of an obligating event.

The next post, part 3 of this series will help you estimate pollution remediation liability. 


For help implementing any of the controls discussed in this series, or if you need further help in identifying whether your government might be affected, please reach out to me via email: kharper@kevinharpercpa.com


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