To record an environmental liability, the cost associated with the liability is

Question

Quizplus · Accepted Answer

When recording an environmental liability, the cost associated with the liability should be included in the carrying amount of the related long-lived asset. This means that the cost should be added to the cost of the asset on the balance sheet rather than expensed immediately. This is because the liability represents a future obligation that will need to be resolved during the life of the asset. Recording the liability in a separate account is not necessary as it can be tracked within the long-lived asset account.

To Record an Environmental Liability, the Cost Associated with the Liability