Accounting for Municipal Solid Waste Landfill Closure and
Postclosure Care Costs
ABSTRACT
METHODOLOGY AND PROCEDURAL RESULTS
In 1993, The Government Accounting Standards Board (GASB) enacted
Statement No. 18,"Accounting for Municipal Solid Waste Landfill Closure and
Postclosure Care Costs," which requires that municipal solid waste landfills
(MSWLF) recognize closure and post closure costs as expenses and liabilities
during the period that the landfill is in operation. All closure and postclosure
costs should be recognized by the time the landfill is closed. However, evidence
indicates that there is a disparity in the way the Statement is addressed in that
disclosure of landfill costs varies from no disclosure, to footnote disclosure to
liability recognition. The objective of this research is to assess why some
municipalities (counties) adopt better disclosures than others. A key component
of this study will be to assess the role that specific social, economic,
demographic, and political attributes play in the disclosure decision. As such, the
study will speak to both economic and social sustainability, two issues that are of
key interest to local and community stakeholders.
The first step in addressing the research question was to identify the relevant
range of municipalities of interest to the study. The top 1000 municipalities by
population was deemed to be the optimal sample for a widely applicable
analysis of closure and postclosure accounting procedures. The primary source
of data regarding these subjects is the municipality’s Comprehensive Annual
Financial Reports (CAFR). The CAFR’s were collected via the respective county
websites, if available. If unavailable online, steps were taken to alternatively
contact these counties to collect the documents. In some cases it was not
possible to collect all of the relevant information; these counties were
eliminated from the scope of the study, as incomplete data would taint any
meaningful analysis. These CAFR’s are then reviewed for completeness and
mined for data. In order to use any data collected it was first necessary to design
a comprehensive database that accounts for all information relevant to
municipality accounting practices. This database is intended for use beyond the
scope of the landfill research question and is intended to be applicable to future
research into the expansive subject of municipality accounting practices and
strategies. Data mined from the CAFR’s was input into the newly designed
database and once again, in the context of all variables included in the database,
vetted for completeness and accuracy; any materially incomplete study
participants and participants that did not have a landfill were ultimately
eliminated from the study. The remaining study participants were then assessed
to determine whether they follow proper procedure according to GASB
Statement No. 18 with relation to the closure and postclosure costs during the
operation of the landfill. Analysis of the data to ascertain municipality
motivation for their actual accounting procedures has not yet ensued.
RESEARCH QUESTION
We seek to find whether the top 1000 counties in the U.S. are adhering to
Statement No.18, and if not, what are the factors motivating either the partial or
total deviation from proper accounting procedures.