Really Fast Computers' Future Environmental Disposals: A Present Concern?

Abstract

Really Fast Computers is a case dealing with asset retirement obligations. The company has an established disposal method for waste presently, but is expanding operations which will create more waste. They have some options for disposing of this waste, with some being undefined at present. Students must decide how to recognize presently these potential liabilities, when the exact disposal methods are not yet decided upon, however, production has begun. They must use an expected value model in determining the liability. In addition, students are asked how IFRS would vary from US GAAP in presenting these liabilities. Students find the ambiguity complex and the uncertainly of disposal methods challenging. Many students are opposed to the expected value method, but also realize that we as accountants cannot wait around until the circumstances become clearer. Students enjoy the case and feel it expands the information presented in the textbook.