Accounting and financial reporting standards require companies to estimate asset retirement obligations (AROs) and environmental obligations as part of their normal accounting and reporting practices. In transactions, companies considering acquisitions, divestitures or spin-offs must be aware of both the reporting complexity and impacts to deal value.
These obligations are driven by environmental regulations that exist at the federal, state and local levels, as well as lease requirements, including:
Certain sectors have a higher exposure to environmental issues and should develop a strong overall environmental management approach to safeguard against infractions and prepare for audits.
Scrutiny from investors and regulators on these continues to increase. Furthermore, the SEC and PCAOB continue to comment on management estimates and the accounting in this area. And while the accounting standards may appear to be clear, interpretation and application of those standards are anything but. So how do you know if your organization measures up?
Our environmental accounting advisory team can bring clarity to these complex regulations and help you reduce your financial reporting risks with environmental liabilities and AROs. We also can help evaluate the impacts of these obligations in transactions.
Our subject matter specialists understand the science, engineering, regulations and cost estimating rules, as well as accounting rules, that are required to effectively address these exposures. They can help you:
"A lot of firms can help with the project. The difference is the people. PwC brings an experienced service team that understands our company and the transaction challenges, and knows how best to get the work done."