The ‘Cost’ of Climate Change: How Carbon Emissions Allowances are Accounted for Amongst European Union Companies
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Following the withdrawal of IFRIC 3: Emissions Rights in 2005, European Union (EU) companies participating in an Emissions Trading Scheme (ETS) do not have definitive guidelines as to how to account for carbon emissions allowances. Using a content analysis methodology, this study examines the disclosed accounting policies of companies participating in the EU ETS, and reveals how, in the absence of clear guidance, they account for their carbon emissions allowances. As the accounting method adopted will impact upon a company's financial statements, these findings are of interest to accounting standards setters, investors, financial reporting preparers, auditors, and researchers.
Australian Accounting Review
Copyright 2012 CPA Australia Ltd (CPA Australia). This is a preprint of an article published in the Australian Accounting Review. Reproduced in accordance with the copyright policy of the publisher. The definitive version is available at http://onlinelibrary.wiley.com/