Thursday, October 16, 2008

'What are the issues that arise in the accounting of CERs?'

Accounting debates on carbon credits

While there can be no two opinions on whether carbon emissions should be reduced, there appears however to be a continuing debate among companies on how to appropriately account for carbon credits. "At present there is no authoritative literature under the generally accepted accounting principles (GAAP) in India or the US, or the International Financial Reporting Standards (IFRS) on CER (certified emission reduction) accounting," says Mr Rahul Chattopadhyay, Associate Director, PricewaterhouseCoopers, IFRS practice. "Most Indian companies show earnings out of carbon credit trading as other income as they are not recognised by tax laws."

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