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Accounting and Financial Reporting for Pollution Remediation Obligations (GASB Statements <br />No. 49) (Continued) <br />Costs of remediation should be accrued for all components (legal fees, site investigation costs, etc.) of <br />- the obligation that are reasonably estimable. The standard outlines a method for recording a liability <br />based on estimated future remediation payments (expected cash flow technique = sum of all probability <br />weighted amounts in a range of possible estimated amounts). The liability should be reduced by any <br />— estimated insurance or other recoveries that are not yet realized or realizable. An asset should be <br />reported separately for any known insurance or other recoveries that are already realized or realizable. <br />If liability recognition is necessary, it is required to be recorded at current value versus estimated future <br />inflating factors for such criteria as unknown technologies, laws or regulations. This liability amount is <br />carried forward unchanged until one of the five benchmarks occurs, there is a change in the remediation <br />plan, or there is a change in operating conditions. <br />IIIIM <br />MMIIII <br />law <br />Additional footnote disclosures accompanying recognition of a liability include explaining the nature and <br />source of the remediation obligation as well as the methods and assumptions used to estimate the <br />liability. <br />(12) <br />