FAS 5: Accounting for Contingencies and Environmental Liabilities
As executive and legislative initiatives focus more on environmental protection, accounting rules have also been changing to achieve more transparency in terms of how companies treat and estimate environmental liabilities. Many questions arise: How will different industries now need to account for their practices? Will they have to spend higher for environmental expenses? Will this impact market capitalization? What can you do to increase transparency, conform to current standards, and alleviate risks? This webcast produced by The Knowledge Group, will discuss how common accounting problems relate to environmental issues and how FAS 5: Accounting for Contingencies, can be applied to regulating environmental liabilities. This event will provide critical, timely updates and should be considered a must-attend event for anyone interested in Accounting for Contingencies and Environmental Liabilities issues. The regulations affect companies of all sizes. This event is highly recommended for companies who have any environmental risk exposure and for companies that may be involved in M&A activity in the near future.
SEGMENT 1: David T. Buente, Partner, Sidley Austin LLP - Overview of FAS 5/types of environmental claims/contingencies that generally trigger FAS 5 disclosure/accrual consideration – 8-10 minutes - Governmental enforcement - Private/governmental remedial liability - Private party environmental litigation (e.g. toxic tort/property damage claims) - Current enforcement trends – areas where we might expect to see new/more numerous disclosures based upon federal/state enforcement priorities - Timing Issues – 5-7 minutes - Common timeline for environmental enforcement matters - Common timeline for remedial matters - Assessing ”probable and estimable” in the context of such timelines – when does disclosure/accrual become appropriate and/or required - Legal Developments – 5 minutes - Asset retirement based liabilities – RCRA corrective action, asbestos, etc. and the evolving requirement for fair value estimation - Effect of Burlington Northern (apportionment of liability rather than strict joint and several liability under CERCLA) on existing accounting guidance on estimating remedial and toxic tort liabilities - Touch on climate change – litigation disclosure issues – would allow a reference to fact that calls for increased climate change disclosure not prompted by FAS 5 considerations, but other SEC disclosure requirements SEGMENT 2: Laura L. Leonard, Partner, Sidley Austin LLP ** Speaker Talking Points to be added soon.. ** SEGMENT 3: Gayle S. Koch, Principal, The Brattle Group - Best Practice/Standards - AICPA SOP 96-1 - ASTM standards - Environmental cost estimation - Environmental disclosure - Climate change financial disclosure (forthcoming) - Consistency Issues with Other Estimates/Disclosures - Voluntary reports - Insurance estimates - Internal management estimates - Transactions, valuations, and tax matters - Estimates disclosed by other PRPs SEGMENT 4: George Hansen, Managing Director, The Claro Group LLC Valuation of Environmental Liabilities - Definition of Fair Value - Methodologies exist to estimate fair value where no liquid market price exists – Point estimates – Decision trees – Probabilistic approaches (monte-carlo analysis) - Illustration – Sample decision tree/probabilistic model and result – Discussion of basic statistics - Application to portfolios – Portfolio must be analyzed as a portfolio, not simply as sum of individual sites – Independence/correlations among sites can be important - Discounting and risk premiums – Discount rates 1. Financial theory (CAPM) 2. Standards (FAS
Who Should Attend:
- Environmental Attorneys - Accountants - Finance Bankruptcy Attorneys - M&A Attorneys
DAVID T. BUENTE, JR. is the head of the firm’s environmental group and represents clients in complex federal environmental litigation, legislative and rulemaking matters, with an emphasis on Clean Air Act, Superfund, environmental criminal and toxic tort matters. Mr. Buente joined the firm in 1990 from the U.S. Department of Justice where he was the Chief of the Environmental Enforcement Section, Environment and Natural Resources Division from 1985 to 1990, directing all federal civil and criminal environmental enforcement litigation. Prior to that, he handled a broad range of federal environmental trial and appellate litigation for EPA and other federal agencies as a Justice Department trial attorney and also served with the Interior Department and the Pennsylvania Attorney General’s Office.
Mr. Buente has represented a number of corporations in complex federal environmental enforcement matters with Justice and EPA, including American Electric Power, Cinergy, General Electric, Georgia Pacific, Ford Motors, Honeywell and Tysons Food, and advised a number of trade associations on diverse environmental issues. He is a member of the American Bar Association's Sections on Environment, Energy and Resources and on Litigation, has served as Vice-Chair on numerous ABA Committees and is currently Vice-Chair of the Environmental Litigation Committee.
Mr. Buente has been cited in a number of surveys of private sector lawyers, including: Chambers USA Leading Lawyers (ranked tier one), and Who’s Who Legal USA: Environment.
DAVID T. BUENTE, JR. is the head of the firm’s environmental group and represents clients in complex federal environmental litigation, …
LAURA L. LEONARD focuses her practice on transfers and allocations of environmental risk in a variety of settings. Laura has extensive experience coordinating diligence and advising on contractual allocations in a wide variety of merger and acquisition and venture capital transactions on behalf of buyers, sellers and lenders, providing structuring advice to minimize successor environmental liability, assisting with respect to SEC reporting of environmental matters and counseling with respect to brownfields redevelopment and environmental insurance
LAURA L. LEONARD focuses her practice on transfers and allocations of environmental risk in a variety of settings. Laura has …
GAYLE S. KOCH, head of The Brattle Group’s Environmental/Mass Tort Practice, has over 25 years of consulting experience focused largely on environmental, product liability, and insurance related issues. She has substantial experience in the estimation of environmental and product liabilities in connection with bankruptcies, insurance claims, acquisitions and divestitures, disclosures, litigation, settlements, and strategic planning. She also serves as the technical contact for ASTM International’s standards on environmental cost estimation and environmental disclosure, as well as a forthcoming standard on climate change disclosure. She has served as a testifying expert on cases involving liability estimation, insurance valuation, allocation, cost recovery and NCP consistency, disclosure, and ability to pay.
Ms. Koch is the Programs Vice Chair for the American Bar Association’s Section of Environment, Energy and Resources (SEER) Environmental Disclosure Committee, and is a Director of the New England Women in Energy and Environment (NEWIEE). Ms. Koch received a B.S. in Chemical Engineering and a B.S. in Humanities and Engineering (in the Science, Technology and Society Program) from M.I.T., and an M.S. in Management Science (concentrations in applied economics, corporate strategy, and management of technological innovation) from the Sloan School of Management, M.I.T. She is located in The Brattle Group’s Cambridge, Massachusetts office (email: Gayle.Koch@brattle.com or phone: 617.864.7900).
GAYLE S. KOCH, head of The Brattle Group’s Environmental/Mass Tort Practice, has over 25 years of consulting experience focused largely …
George Hansen is a business consultant in the areas of complex claims and risk. He is a co-founder of The Claro Group, LLC, a financial advisory firm formed out of a Big 5 accounting/consulting firm, where he was a managing partner.
George has over 15 years of experience assisting clients with valuation and valuation methodologies for environmental and toxic tort liabilities in the context of transactions, litigation, and financial reporting. He has an MBA from Carnegie-Mellon’s Tepper School and holds a BS in Engineering Science from Georgia Tech.
George Hansen is a business consultant in the areas of complex claims and risk. He is a co-founder of The …
C. Gregory Rogers, J.D., CPA is President and founder of Advanced Environmental Dimensions, LLC. Mr. Rogers is recognized in Best Lawyers in America in the field of environmental law. He is author of Financial Reporting of Environmental Liabilities and Risks after Sarbanes-Oxley (Wiley, 2005), past chairman of the American Bar Association's Environmental Disclosure Committee, and one of 30 national experts contributing to the U.S. Government Accountability Office (GAO) investigation and report to Congress on Environmental Disclosures (July 2004).
C. Gregory Rogers, J.D., CPA is President and founder of Advanced Environmental Dimensions, LLC. Mr. Rogers is recognized in Best …
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