Why not apply a net present value (NPV) to the deemed liability of new facilities?
The intent of applying a deemed liability value in the LLR/LMR is to ‘crystallize’ the existing liability at the time of transfer. For sites subject to site-specific liability assessments, the age and condition of the facility is inherently taken into consideration when evaluating site conditions. The deemed liability is an estimate of the current day costs to suspend, abandon, remediate, and reclaim whereas an NPV is applied in financial reporting to reflect the current value of a cost to be realized in the future.
