Waste Management 2007 Annual Report Download - page 61

footprint and required landfill buffer property. The projection of these landfill costs is dependent, in part, on future
events. The remaining amortizable basis of each landfill includes costs to develop a site to its remaining permitted
and expansion capacity and includes amounts previously expended and capitalized, net of accumulated airspace
amortization, and projections of future purchase and development costs.
Final Capping Costs — We estimate the cost for each final capping event based on the area to be finally
capped and the capping materials and activities required. The estimates also consider when these costs would
actually be paid and factor in inflation and discount rates. Our engineering personnel allocate final landfill capping
costs to specific capping events. The landfill capacity associated with each final capping event is then quantified and
the final capping costs for each event are amortized over the related capacity associated with the event as waste is
disposed of at the landfill. We review these costs annually, or more often if significant facts change. Changes in
estimates, such as timing or cost of construction, for final capping events immediately impact the required liability
and the corresponding asset. When the change in estimate relates to a fully consumed asset, the adjustment to the
asset must be amortized immediately through expense. When the change in estimate relates to a final capping event
that has not been fully consumed, the adjustment to the asset is recognized in income prospectively as a component
of landfill airspace amortization.
Closure and Post-Closure Costs — We base our estimates for closure and post-closure costs on our inter-
pretations of permit and regulatory requirements for closure and post-closure maintenance and monitoring. The
estimates for landfill closure and post-closure costs also consider when the costs would actually be paid and factor
in inflation and discount rates. The possibility of changing legal and regulatory requirements and the forward-
looking nature of these types of costs make any estimation or assumption less certain. Changes in estimates for
closure and post-closure events immediately impact the required liability and the corresponding asset. When the
change in estimate relates to a fully consumed asset, the adjustment to the asset must be amortized immediately
through expense. When the change in estimate relates to a landfill asset that has not been fully consumed, the
adjustment to the asset is recognized in income prospectively as a component of landfill airspace amortization.
Remaining Permitted Airspace — Our engineers, in consultation with third-party engineering consultants and
surveyors, are responsible for determining remaining permitted airspace at our landfills. The remaining permitted
airspace is determined by an annual survey, which is then used to compare the existing landfill topography to the
expected final landfill topography.
Expansion Airspace — We include currently unpermitted airspace in our estimate of remaining permitted and
expansion airspace in certain circumstances. First, to include airspace associated with an expansion effort, we must
generally expect the initial expansion permit application to be submitted within one year, and the final expansion
permit to be received within five years. Second, we must believe the success of obtaining the expansion permit is
likely, considering the following criteria:
• Personnel are actively working to obtain land use and local, state or provincial approvals for an expansion of
an existing landfill;
• It is likely that the approvals will be received within the normal application and processing time periods for
approvals in the jurisdiction in which the landfill is located;
• We have a legal right to use or obtain land to be included in the expansion plan;
• There are no significant known technical, legal, community, business, or political restrictions or similar
issues that could impair the success of such expansion;
• Financial analysis has been completed, and the results demonstrate that the expansion has a positive
financial and operational impact; and
• Airspace and related costs, including additional closure and post-closure costs, have been estimated based on
conceptual design.
For unpermitted airspace to be initially included in our estimate of remaining permitted and expansion
airspace, the expansion effort must meet all of the criteria listed above. These criteria are evaluated by our field-
based engineers, accountants, managers and others to identify potential obstacles to obtaining the permits. Once the
unpermitted airspace is included, our policy provides that airspace may continue to be included in remaining
permitted and expansion airspace even if these criteria are no longer met, based on the facts and circumstances of a
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