Background By law, entities must handle and dispose of certain types of asbestos in a special manner. Specifically, if a factory containing asbestos undergoes major renovations or is demolished, the asbestos will require remediation. Companies generally record such remediation obligations as Asset Retirement Obligations (ARO). Argent Corp.s corporate headquarters, built in 2000, has asbestos in its insulation. The Companys financial statements reflect a $5 million asset retirement obligation (ARO) for the eventual remediation of the asbestos. This ARO was initially estimated and recorded in 2005 when the company adopted FIN 47, Accounting for Conditional Asset Retirement Obligations (pre-codification literature). Amounts recorded for AROs are generally estimated due to significant uncertainties as to the ultimate cost. In 2021, while performing routine maintenance work on the facility, workers identified the presence of additional asbestos in more places than the Company had documented during its initial estimate. The Company now believes the total cost to remediate the asbestos will be $9 million. The initial estimate ($5 million) was based on a review of the plant for specific areas believed to contain asbestos. The newly-discovered areas with asbestos were in a part of the facility that was not originally examined back in 2005. The Setting You are the Manager on the 2021 audit of Argent and are examining the above accounting issues that have subjective aspects. The audit partner has asked you to analyze these issues and prepare an accounting issues memorandum (minimum 2, maximum 3 pages, single-spaced) to assess the appropriate accounting treatment of this issue and to support your position. Also, the partner has asked you to present your work to the Controller and CFO of Argent, each of whom has limited accounting knowledge in this area. The presentation is approx. 15 minutes and should include approx. 8-10 Powerpoint slides. Use the ASC and, in addition, you must include 2 references to accounting firm literature. Required In your memorandum and presentation, you must address each of the following questions: 1. The Companys controller and CFO are questioning whether this liability for asbestos disposal is even necessary at all. They argue that asbestos must only be remediated if it is disturbed (such as through renovations), and points out that the company does not have any immediate plans to renovate the building. Respond to his question using authoritative guidanceis a liability even necessary, if the companys plans for disposal or renovation of this building are uncertain? (Explain your reasoning and provide support).