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Exponent Environmental Perspectives Newsletter


February 2, 2010

We are pleased to feature the Winter Edition of the Environmental Perspectives Newsletter, which includes the feature article, “Bankruptcy and Environmental Liability Assessment,” by Dr. Mark Johns.

Bankruptcy is becoming common in today’s economic climate, and evaluating the costs for environmental liabilities can be a critical issue in bankruptcy court. Such liabilities can pose a significant risk to the financial health of U.S. businesses. The acknowledgment of this risk is reflected in recent changes to accounting standards that require companies involved in mergers and acquisitions to report certain contingencies, including environmental liabilities, at fair market value. These standards require the recognition of environmental cleanup obligations that, under former accounting standards, may have fallen into the “cannot be reasonably estimated” category or were accrued at the lower end of the estimated range. Understanding fair-value measurement of environmental liabilities is quickly becoming an important business issue, as it may call into question the solvency of some companies.

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Our previous Environmental and Health newsletters can be found in our archives.