Nice Nuke Corporation, which owns and operates a nuclear plant, recently received notice from the provincial government that it has to find a new disposal site for its radioactive waste. The company was also told that it is responsible for its radioactive waste. The company was also told that it is responsible for the environmental cleanup of the old site. The vice-president of engineering and the vice-president of finance meet the discuss the situation. The engineer says that it could take many years to clean up the site and that the cost could be considerable-a minimum of $50 million and perhaps as much as $100 million.
The vice-president of finance says that there is no way that the company can afford to record this liability. He says he is not even sure that he wants to disclose the potential liability, because of how this could affect the company's share price.
Questions:
a) who are the stakeholders in this situation?
b)what are the alternative reporting options that the company can use?
c)what is the likely impact of each alternative on the company's financial position?
d) is there anything unethical in what the vice-president of finance suggests doing about this potential liability?
e) what do you recommend the company do?
Please do reply...
CAclubindia
