This confidential client is a Fortune 500 manufacturer of paint and coatings in North America and throughout the world. EHS Support was retained to perform an assessment of its global asset retirement obligations throughout its current operating locations in North America, South America, Asia, Europe, and South Africa.
Financial accounting standards interpret a conditional asset retirement obligation (ARO) as a legal obligation to perform the asset retirement activity. Companies are required to detail their AROs on their financial statements to accurately portray their overall values. When long-lived assets contain hazardous substances, as determined, and defined by federal legislation (e.g., asbestos, lead, etc.), organizations have a legal obligation and, consequently, accounting liability (classified as “Conditional Asset Retirement Obligation” (CARO)) related to those assets.
After an extensive review of the various international laws and regulations, EHS Support updated the client’s existing CARO reporting matrix with the current regulatory requirements for the applicable countries. This included requirements for facility obligations such as asbestos, landfills, permits, polychlorinated biphenyls, radioactivity, soil and groundwater cleanup, storage tanks, wastewater discharge and treatment, wells, and other assets, all in an effort to verify any CARO triggering conditions as of November 2020.
EHS Support’s assessment identified current environmental laws and regulations for an up-to-date snapshot of asset retirement obligations, which enabled the client to plan for these obligations accordingly as part of their financial reporting program.