Bankruptcy is rapidly becoming more common in today’s economic climate. Companies are reviewing their allocation of contingent liabilities that may have been developed under older accounting standards that focused on certainty over market-based projections. Exponent consultants have been involved in evaluating environmental liabilities both before and after bankruptcy. Current accounting standards that are being phased in over the next several years require companies involved in mergers and acquisitions to report certain contingencies, including environmental liabilities, at market value.
These new standards require the recognition of environmental cleanup obligations that, under former accounting standards, may have fallen into the “cannot be reasonably estimated” category. Understanding fair-value measurement of environmental liabilities is quickly becoming an important business issue. Courts are evaluating solvency issues that arise under corporate and bankruptcy laws and are not limited to valuing only the debtor’s loans and payables—they also can consider contingent and off-balance-sheet liabilities. Creditors and shareholders can implement these accounting standards immediately.
Exponent personnel have particular expertise in the following issues:
- Risk consulting
- Remedial costing
- Valuation for contingent liabilities
- International accounting standards
- Environmental liability valuation and forecasting
- Monte Carlo uncertainty simulations
- Probabilistic cost analysis
- Allocation and apportionment
- Consulting and expert testimony.