The authors of this paper postulate that the use of non-standardized financial reporting, as it relates to carbon accounting, is resultant of the organic development of those methods coupled with the lack of guidance from authoritative sources. FASB appears to have ceased efforts to provide authoritative guidance on the issue of emissions allowances as of 2014 and the IASB has likewise done little to address these issues. Based on interviews with executives in the carbon mitigation industry there appears to be a need for guidance on carbon accounting issues. As a minimum, standards to ensure that the financial statement treatment of carbon credits meet the basic goals of comparability set by the Conceptual Framework are required. The article concludes with a look forward toward potential developments and a call to the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) to provide authoritative guidance in this area.
Carbon Accounting, Carbon Credits, Financial Reporting, Carbon Markets