At present, there are no specific International Financial Reporting Standards (IFRS) or US Generally Accepted Accounting Principles (US GAAP), or interpretations of those standards, that relate to carbon credit markets. This whitepaper addresses key accounting questions under existing guidance for both compliance carbon credits and voluntary carbon credits.
The paper addresses key accounting issues for entities that expect to use carbon credits to offset their own emissions, those that will trade these instruments in a secondary market and those that intend to do a combination of both. The paper addresses issues relevant to the application of both IFRS and US GAAP, although IFRS is the principal focus.
ISDA encourages the International Accounting Standards Board and the Financial Accounting Standards Board to work together where possible to develop consistent accounting standards for carbon credits under IFRS and US GAAP.
Documents (1) for Accounting for Carbon Credits
Latest
Expanding Legal Agreement Coverage in the CDM
This paper examines the recent extension of the Common Domain Model (CDM)1 to represent two of the most significant, and previously undeveloped, areas of its legal agreement model: umbrella agreements and contract amendments. Umbrella agreements are widely used to document...
ISDA Omnibus Canadian Representation Letter
On September 2, ISDA published the Omnibus Canadian Representation Letter, which combines previously published representation letters drafted to assist firms in compliance with Canadian trade reporting, business conduct, regulatory margin and clearing classification rules. The Omnibus Canadian Letter is designed...
Joint Response on Cross-margining
On August 31, ISDA and FIA submitted a letter to the US Commodity Futures and Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) on the agencies’ joint request for comment on the implementation of portfolio margining and cross-margining...
Accounting for Carbon Credits: Latest Developments
This paper updates and extends the analysis set out in ISDA’s October 2023 paper on accounting for carbon credits. While preserving the original focus on the accounting treatment of voluntary carbon credits (VCCs) and compliance carbon credits (CCCs), it expands...