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<br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br /> <br /> <br />City of Centerville <br />May 29,2008 <br />Page 23 <br /> <br />GASB Statement No. 49 - Accounting and Financial Reportingfor Pollution Remediation Obligations <br /> <br />This statement was issued November 2007 and is effective for periods beginning after December 15,2007, but liabilities should <br />be measured at the beginning of that period so that beginning net assets can be restated. <br /> <br />This standard is intended to ensure that certain cost and long-term obligations related to pollution clean up not specifically <br />addressed by current governmental accounting standards will be included in financial reports. The standards set forth the key <br />circumstances under which a government would be required to report a liability related to pollution remediation. A government <br />would have to determine whether one or more components of a pollution remediation liability are recognizable if any of the <br />following five obligating events or triggers occurs: <br /> <br />. A government is compelled to take remediation action because pollution creates an imminent endangerment to the <br />public health or welfare or environment, leaving it little or no discretion to avoid remediation action. <br /> <br />. A government is in violation of a pollution prevention-related permit or license. <br /> <br />. The government is named, or evidence indicates it will be named, by a regulator that has identified the government <br />as a responsible party or potentially responsible party for remediation, or as a government responsible for sharing <br />costs. <br /> <br />. A government is named, or evidence indicates that it will be named, in a lawsuit to compel the government to <br />participate in remediation. <br /> <br />. A government commences or legally obligates itself to commence clean up activities or monitoring or operation and <br />maintenance of the remediation effort. <br /> <br />If any of the above bullets are met, the pollution remediation liabilities should be measured at their current value using the <br />expected cash flow technique, which measures the liability as a sum of probability-weighted amounts in a range of possible <br />estimated amounts. Expected recoveries from other responsible parties and from insurers reduce the amount of remediation <br />expense. Statement No. 49 also specifies criteria for capitalization of some pollution remediation outlays. <br /> <br />952.835.9090 . Fax 952.835.3261 <br />www.aemcpas.com <br />