Accounting Standards Board Newsletter #3

Accounting Standards Board
Newsletter #3 - June 2022

In this edition of the Newsletter:

The inclusion of post-monitoring and inspection costs when calculating the landfill site provision

A number of municipalities operate and manage landfill sites in undertaking waste disposal activities. The environment within which these sites are operated, is highly regulated. License holders operating a landfill site, are required under the Waste Act, Act No 59 of 2008, to adhere to the Minimum Requirements issued in terms of the Act.
As per section 4 of the Guideline on Accounting for Landfill Sites [https://www.asb.co.za/guidelines] the cash flows that should be considered in calculating the landfill rehabilitation provision include:

costs to dismantle, remove, rehabilitate and/or restore on an ongoing basis and on closure of the landfill site;
pre-closure planning and approval costs;
final rehabilitation and closure costs; and
post-monitoring and inspection costs to be undertaken after the closure of the landfill site.

What do the Minimum Requirements say about post monitoring and inspection costs?

In terms of the Minimum Requirements, and based on an entity’s license conditions, it needs to undertake post-monitoring and inspection activities after the closure of a landfill site. This is to ensure that any post-closure problems are identified and addressed in a timely manner when the site no longer receives waste. The monitoring and inspection of a site needs to be undertaken at regular intervals.

Monitoring and inspection costs form part of the obligation to restore the landfill site, and to rehabilitate the environmental damage to the land after closure of the site. The Minimum Requirements indicate that an entity remains responsible for the monitoring of the landfill site for a period of up to thirty years after the closure of the site. However, consideration should also be given to the specific license conditions when an entity estimates its obligation for post-closure monitoring and inspection.

Even if an entity’s license conditions are silent about the time period over which the monitoring and inspection should take place, the entity should consider the Minimum Requirements.

Disclaimer

The Newsletter has been prepared by the Secretariat of the ASB for information purposes only. It has not been reviewed, approved or otherwise acted on by the Board.