Since April 1st2014,a new accounting standard has been established for municipal authorities to inventory their environmental liabilities with respect to contaminated sites. Indeed, the new PS 3260 chapter of the CICA Public Sector Accounting Handbook now includes requirements for the identification and assessment of contaminated sites so they can be recognized in financial statements.

Chapter SP 3260 thus sets out the requirements for the recognition of a contaminated site as defined by the standard and the information to be presented in the financial statements.

Sites covered by this standard are those used for non-productive purposes (e.g. vacant land) that are the property of the municipal authority or for which the municipal authority has agreed to be accountable. However, a currently productive site may be subjected to this standard if the cause of contamination originates from a prior usage.

Also, an unforeseen event that results in contamination (e.g. accidental spill) may constitute a situation that is a liability with regard to the remediation of a contaminated site.


Recognition Criteria:

As of the financial statements date, a liability for the remediation of contaminated sites must be recorded when all of the following 5 items are addressed:

  • An environmental standard exists
  • The contamination exceeds the environmental standard
  • The individual is directly responsible or assumes responsibility
  • It is expected that future economic benefits will be forsaken
  • A reasonable estimate of the amount in question can be made


Costs Resulting from Liability Accounting:

As of the financial statements date, the costs associated with the accounting of contaminated sites liabilities must be used to restore a site to the current minimum standard that applies to the use of the site prior to contamination. Costs must include:

  • Costs directly incurred for the site remediation (wages, equipment, social benefits, legal and professional services, etc.)
  • Costs incurred for operations, maintenance and monitoring following the site remediation (environmental monitoring)
  • The cost of the asset to be acquired through the implementation of remediation activities, with said asset to provide for the same use


Through this new accounting standard, municipal authorities can now take part in the environmental liability assessment in Quebec with regard to the contaminated sites issue.

Municipal authorities must rely on environmental experts able to confirm the existence of a contaminated site and the amount to which such liabilities should be assessed.


Environment PH inc. gives municipal authorities the opportunity to receive guidance in assessing their contaminated sites liabilities.

  • Conduct of turnkey environmental assessments
  • Identification of contaminated sites to be recorded in the financial statements
  • (based on the 5 applicable criteria)
  • Estimation of costs related to remediation activities

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