Environmental remediation costs have become increasingly prevalent in the last few decades. Read paragraphs 4 through 7,

Question:

Environmental remediation costs have become increasingly prevalent in the last few decades. Read paragraphs 4 through 7, paragraph 15, and paragraph 25 of ASC 410- 30- 05. Also read paragraphs 1 through 13 of ASC 410- 30- 25.
1. Briefly explain the following terms:
a. Environmental remediation liability
b. Superfund
c. Potentially responsible parties
2. Are environmental remediation liabilities a type of contingent liability?
3. Are the rules governing the accrual of environmental remedial liabilities the same as those governing the accrual of other ?
4. Based on your review of the literature, respond to the following questions.
a. What factors do firms consider in the estimation of environmental remediation liabilities?
b. What does an entity do if it can only reasonably estimate some of the components of the liability?
c. What if the entity can only estimate a range for the obligation?
d. What if there are uncertainties about the share of the obligation the entity will bear?
Contingent liabilities
A contingent liability is an obligation of business related to an uncertain future event. The business must record it in its financial statements if the amount can be reliably estimated and it is probable that amount will be paid by business as a...