Environmental cleanup: Accounting for future costs can be a messy problem

Authors

  • William F. Jordan,

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    • William F. Jordan is professor of accounting at Florida State University. He teaches and conducts research in tax and issues related to limited partnerships. His articles have appeared in a variety of accounting publications.

  • William Hillison

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    • William Hillison is professor of accounting at Florida State University, where he holds the Arthur Andersen Chair. He is coauthor with Irvin N. Gleim of the books CPA Review: Auditing and Auditing and EDP: Objective Questions and Answers. Hillison has written extensively on accounting issues.


Abstract

Accounting for future cleanup costs affects more than just utility companies. Other companies have similar accounting practices and should be concerned about any precedents that are established. This article discusses the problems in accounting for future remediation costs, compares the pros and cons of different treatments, and looks at the funding versus accounting issue.

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