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A Case Study of the Accounting Models for the Participants in an Emissions Trading Scheme

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  • Marius Deac

    (Deparment of Finance and Accounting, Faculty of Economics Cluj-Napoca,“Dimitrie Cantemir” Christian University, Cluj-Napoca, Romania)

Abstract

As emissions trading schemes are becoming more popular across the world, accounting has to keep up with these new economic developments. The absence of guidance regarding the accounting for greenhouse gases (GHGs) emissions generated by the withdrawal of IFRIC 3- Emission Rights - is the main reason why there is a diversity of accounting practices. This diversity of accounting methods makes the financial statements of companies that are taking part in emissions trading schemes like EU ETS, difficult to compare. The present paper uses a case study that assumes the existence of three entities that have chosen three different accounting methods: the IFRIC 3 cost model, the IFRIC 3 revaluation model and the “off balance sheet” approach. This illustrates how the choice of an accounting method regarding GHGs emissions influences their interim and annual reports through the chances in the companies’ balance sheet and financial results.

Suggested Citation

  • Marius Deac, 2013. "A Case Study of the Accounting Models for the Participants in an Emissions Trading Scheme," Acta Universitatis Danubius. OEconomica, Danubius University of Galati, issue 5(5), pages 40-49, October.
    • Handle: RePEc:dug:actaec:y:2013:i:5:p:40-49
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    File URL: http://journals.univ-danubius.ro/index.php/oeconomica/article/view/1859/1903
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    References listed on IDEAS

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    1. Cook, Allan, 2009. "Emission rights: From costless activity to market operations," Accounting, Organizations and Society, Elsevier, vol. 34(3-4), pages 456-468, April.
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