Distinguish between a liability and a environmental liability. Is there any difference in the principle?
A liability is a present obligation of the enterprise arising from the past events, the settlement of which is expected to result in an outflow from the enterprise of resources embodying economic benefits whereas An environmental liability is an obligation to pay future expenditures to remedy environmental damage that has occurred because of past events or transactions, or to compensate a third party that has suffered from the damage. An environmental liability exists when there is a requirement, based on statute, regulation, or legal agreement to perform cleanup (i.e., removal, containment, disposal) from federal operations that resulted in hazardous waste. Environmental liabilities must be recognized on the financial statement for probable and measurable future outflows or expenditure of resources for environmental cleanup, closure, and/or disposal actions. Obligation based on the principle that a polluting party should pay for any and all damage caused to the environment by its activities. In some countries, this is a strict liability if the damage can be attributed to a specific party. The principle of liability applies to environmental damage and imminent threat of damage resulting from occupational activities, where it is possible to establish a causal link between the damage and the activity in question. The essential characteristic of a liability is that the enterprise has a present obligation. Therefore , an environmental liability is probable if for example : 1. A legal obligation is exists
2. The management wants to prevent, reduce or repair substantial environmental impacts 3. A company in the US has been named by the US EPA as a potential responsible party to clean up as US Superfund site.
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