The FASB’s Emerging Issues Task Force (EITF) considered the question of how the costs incurred in removing asbestos from buildings should be treated (Issue 89–13). This is a widespread issue because studies indicate that some 20% of buildings in the United States contain asbestos. The EITF considered the following specific questions:
1. If a company purchases a building with a known asbestos problem, should the removal costs be expensed or capitalized?
2. If a company discovers an asbestos problem in a building it already owns, should the removal costs be expensed or capitalized?