Read the following extract from an article entitled ‘Tanks to go at old refinery’ by Cameron England that appeared in The Advertiser on 17 September 2012.

The demolition of the Port Stanvac oil refinery has begun, nine years after the site was abandoned. Site owner Exxon Mobil says it will take until the end of next year to remove the refinery and storage tanks, but full remediation of the site will take another few years. Mobile decided in 2009 it would never reopen the site and has since been working on a plan to remediate it. Demolition of the site started last month. [Mobil Spokesman] Mr Bailey said Mobil did not believe the site was heavily contaminated, but because of the four decades of heavy industrial use, it would still need to be remediated.

‘Over that length of time, there are impacts on the site,’ he said. ‘It’s a very big site and much of the site has not had any oil processing or tanks on it, so a lot of the site is lightly impacted, if any.’ 

Mobil discontinued its refining operations in Port Stanvac, South Australia, over a decade ago. Due to years of operations, the land is thought to be highly contaminated, yet the contamination has not been resolved.

REQUIRED

Assuming that Mobil is required to produce general purpose financial reports that comply with Australian reporting requirements, how do you believe that Mobil should currently account for the costs that could be necessary to remediate the site? When should Mobil have started recognising the costs and liabilities associated with the contamination?