From an accounting perspective, the disclosure and possible recording of environmental and climate change liabilities haven't changed much since I covered those topics in Accounting And Its Legal Implications (1994).  Of course, the discussion about and law pertaining to environmental and climate change issues have changed significantly.  Now, according to some people, those topics also should be covered in more detail in the financial statements and related notes.  See http://www.thecorporatecounsel.net/E-minders/ for October 2007, and http://www.tacklingglobalwarming.com.  A request has been made that the SEC provide additional guidance about those matters.  The AICPA also has recently determined to review SFAS NO. 5, Accounting for Contingencies, as a long-term project.  The results and complexities for audit committees are potentially significant.

Currently, the rules for recording or disclosing possible environmentally related liabilities still are governed by SFAS No. 5, Accounting for Contingencies, Financial Accounting Standards Board Interpretation No. 14, Regulation S-K Item 101, Description of Business, Regulation S-K Item 103, Legal Proceedings, Regulation S-K Item 303, Management's Discussion and Analysis of Financial Condition and Results of Operations, and SAB (Staff Accounting Bulletin) 92.

Pursuant to SFAS No. 5, after the existence of a possible liability is established, the probability that the loss or liability will occur is evaluated and classified as being probable, reasonably possible, or remote.  If it is estimated that the actual occurrence of loss or liability is probable, and that the amount of the loss or liability can be reasonably estimated, the amount of the loss or liability is recorded in the financial statements as a dollar amount.  If the probability that the loss or liability will occur is reasonably possible, or if the probability of occurrence is probable, but the amount of the loss or liability cannot be reasonably estimated, the amount of the loss or liability is not recorded as a dollar amount, but the financial statements should contain a disclosure describing the nature of the contingency and the estimated minimum and maximum ranges of possible loss or liability, or a statement that no estimate of the amount of the loss or liability can be made.  Generally, no disclosure of the loss or liability is made if the probability of the occurrence is remote.  With respect to an unasserted claim, when there is no indication that a potential plantiff or claimant is aware of the possible claim, disclosure is required if it is probable that a claim will be made, and there is a reasonable possibility that the outcome of the claim or litigation will be unfavorable.

More to follow on these topics, I am sure.

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