Construction costs
In accordance with GAAP, Waste Management was able to capitalize interest related to landfill development because of the relatively long time required to obtain permits, construct landfills, and prepare them to receive waste. However, Waste Management utilized the “net book value (NBV) method,” which essentially enabled it to avoid GAAP’s requirement that interest capitalization cease once the asset became substantially ready for its intended use. Waste Management’s auditor, Arthur Andersen, advised the company from its first use of the NBV method (in 1989) that this method did not conform to GAAP.