Waste Management 2014 Annual Report Download - page 115

capping costs to specific final 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
interpretations of permit and regulatory requirements for closure and post-closure monitoring and maintenance.
The estimates for landfill closure and post-closure costs also consider when the costs are anticipated to 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 used to compare the existing landfill topography
to the expected final landfill topography.
Expansion Airspace — We also include currently unpermitted expansion 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 that obtaining the
expansion permit is likely, considering the following criteria:
• Personnel are actively working on the expansion of an existing landfill, including efforts to obtain land
use and local, state or provincial approvals;
• 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 negatively affect the success of such expansion; and
• Financial analysis has been completed based on conceptual design, and the results demonstrate that the
expansion has a positive financial and operational impact.
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 certain of these criteria are no longer met as long as we continue to
believe we will ultimately obtain the permit, based on the facts and circumstances of a specific landfill. In these
circumstances, continued inclusion must be approved through a landfill-specific review process that includes
approval by our Chief Financial Officer and a review by the Audit Committee of our Board of Directors on a
quarterly basis. Of the 23 landfill sites with expansions included at December 31, 2014, five landfills required the
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