Critical accounting policies Environmental obligations Impairments and valuation of long-lived assets Pensions and other postretirement benefits 32 FMC Corporation    2010 Form 10K Our consolidated financial statements are prepared in conformity  with U.S generally accepted accounting principles. The preparation of  these financial statements requires us to make estimates and judgments  that affect the reported amounts of assets, liabilities, revenues and  expenses. We have described our accounting policies in Note 1 to our  consolidated financial statements included in this Form 10-K. We have  reviewed these accounting policies, identifying those that we believe to  be critical to the preparation and understanding of our consolidated  financial statements. We have reviewed with the Audit Committee  those accounting policies that we have deemed critical. These policies  are central to our presentation of results of operations and financial  condition and require management to make estimates and judgments  on certain matters. We base our estimates and judgments on historical  experience, current conditions and other reasonable factors. considered the identity and financial condition of the other PRPs at  each site to the extent possible. We have also considered the identity  and financial condition of other third parties from whom recovery  is anticipated, as well as the status of our claims against such parties.  Although we are unable to forecast the ultimate contributions of PRPs  and other third parties with absolute certainty, the degree of uncertainty  with respect to each party is taken into account when determining the  environmental reserve by adjusting the reserve to reflect the facts and  circumstances on a site-by-site basis. Our liability includes our best  estimate of the costs expected to be paid before the consideration of  any potential recoveries from third parties. We believe that any recorded  recoveries related to PRPs are realizable in all material respects. Recoveries  are recorded as either an offset in “Environmental liabilities, continuing  and discontinued” or as “Other Assets” in our consolidated balance  sheets in accordance with U.S. accounting literature. See Note 10 to our consolidated financial statements included in this  Form 10-K for changes in estimates associated with our environmental  obligations. We provide for environmental-related obligations when they are  probable and amounts can be reasonably estimated. Where the available  information is sufficient to estimate the amount of liability, that estimate  has been used. Where the information is only sufficient to establish a  range of probable liability and no point within the range is more likely  than any other, the lower end of the range has been used. Estimated obligations to remediate sites that involve oversight by the  United States Environmental Protection Agency (“EPA”), or similar  government agencies, are generally accrued no later than when a Record  of Decision (“ROD”), or equivalent, is issued, or upon completion of a  Remedial Investigation/Feasibility Study (“RI/FS”), or equivalent, that  is submitted by us to the appropriate government agency or agencies.  Estimates are reviewed quarterly by our environmental remediation  management, as well as by financial and legal management and, if  necessary, adjusted as additional information becomes available. The  estimates can change substantially as additional information becomes  available regarding the nature or extent of site contamination, required  remediation methods, and other actions by or against governmental  agencies or private parties. Our long-lived assets include property, plant and equipment and  long-term investments, goodwill and intangible assets. We test for  impairment whenever events or circumstances indicate that the net  book value of these assets may not be recoverable from the estimated  undiscounted expected future cash flows expected to result from their  use and eventual disposition. In cases where the estimated undiscounted  expected future cash flows are less than net book value, an impairment  loss is recognized equal to the amount by which the net book value  exceeds the estimated fair value of assets, which is based on discounted  cash flows at the lowest level determinable. The estimated cash flows  reflect our assumptions about selling prices, volumes, costs and market  conditions over a reasonable period of time. We perform an annual impairment test of goodwill in the third quarter.  The assumptions used to estimate fair value include our best estimate  of future growth rates, discount rates and market conditions over a  reasonable period. We performed this test in 2010 and determined  that no impairment charge was required. See Note 7 to our consolidated financial statements included in this  Form 10-K for charges associated with long-lived asset disposal costs  and the activity associated with the restructuring reserves. Our environmental liabilities for continuing and discontinued operations  are principally for costs associated with the remediation and/or study  of sites at which we are alleged to have released hazardous substances  into the environment. Such costs principally include, among other  items, RI/FS, site remediation, costs of operation and maintenance  of the remediation plan, fees to outside law firms and consultants for  work related to the environmental effort, and future monitoring costs.  Estimated site liabilities are determined based upon existing remediation  laws and technologies, specific site consultants’ engineering studies or by  extrapolating experience with environmental issues at comparable sites. We provide qualified and nonqualified defined benefit and defined  contribution pension plans, as well as postretirement health care  and life insurance benefit plans to our employees and retirees. The  costs (benefits) and obligations related to these benefits reflect key  assumptions related to general economic conditions, including interest  (discount) rates, healthcare cost trend rates, expected rates of return  on plan assets and the rates of compensation increases for employees.  The costs (benefits) and obligations for these benefit programs are also  affected by other assumptions, such as average retirement age, mortality,  employee turnover, and plan participation. To the extent our plans’  actual experience, as influenced by changing economic and financial  market conditions or by changes to our own plans’ demographics,  differs from these assumptions, the costs and obligations for providing  these benefits, as well as the plans’ funding requirements, could increase  or decrease. When actual results differ from our assumptions, the  Included in the environmental reserve balance, other assets balance and  disclosure of reasonably possible loss contingencies are amounts from  third party insurance policies, which we believe are probable of recovery. Provisions for environmental costs are reflected in income, net of  probable and estimable recoveries from named Potentially Responsible  Parties (“PRPs”) or other third parties. Such provisions incorporate  inflation and are not discounted to their present values. In calculating and evaluating the adequacy of our environmental reserves,  we have taken into account the joint and several liability imposed by  Comprehensive Environmental Response, Compensation and Liability  Act (“CERCLA”) and the analogous state laws on all PRPs and have  Part II  iteM 7 Management’s Discussion and analysis of Financial Condition and results of operations