Emissions Trading Schemes (Research Project)
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Project milestones
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In May 2012, the IASB decided to add Emission Trading Schemes to its agenda as a research project.
Emissions trading schemes are designed to achieve a reduction of greenhouse gases through the use of tradable emission permits.
Discussions on the emissions trading scheme project were deferred in November 2010 when the IASB and the FASB decided to amend the timetable of some projects.
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The Board added the emissions trading scheme project to its agenda in October 2005. The Board reactivated work on the project in December 2007. Among the reasons for adding the topic to the agenda, the Board noted the increasing international use (or planned use) of schemes designed to achieve reduction of greenhouse gases through the use of tradable permits. It also noted that there was a risk of diverse accounting practices for such schemes following the withdrawal of IFRIC 3 Emission Rights and that this would impair the comparability and usefulness of financial statement information.
The project is in the early stages of completion. The IASB and the FASB have made tentative decisions on some of the main issues in the project, including the recognition of assets and liabilities when the entity receives emission allowances from the scheme administrator for no monetary consideration. However, there are many issues in the project that are yet to be discussed. ( Click here to access all previous IASB updates on this project.) In the meantime, the boards are seeking feedback on the project.
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Project news
May 2012 The Board unanimously supported initiating a research programme, focusing initially on discount rates; the equity method of accounting; extractive activities/intangible assets/R&D; financial instruments with the characteristics of equity; foreign currency translation; non-financial liabilities; and financial reporting in high-inflation and hyperinflationary economies.
29 June 2011 Discussions on the emissions trading scheme project were deferred in November 2010 when the IASB and the FASB decided to amend the timetable of some projects. As a result of the pause in work on this project, the IASB will consider whether the project will remain on the agenda as part of its agenda consultation process. Please click here for the agenda consultation project page.
14 October 2010 This project will be discussed by the boards at their October 2010 meeting. For more information and observer notes as they become available, please click here and select a board meeting date
8 September 2010 This project will be discussed by the boards at their September 2010 meeting. For more information and observer notes as they become available, please click here
Click here to see all previous project news on this project.
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Last IASB meeting update
18 November 2010 The IASB and the FASB discussed accounting issues in a cap and trade scheme. Specifically, the boards discussed the recognition of a liability for emissions in excess of the initial allocation and the measurement of liabilities and purchased allowances.
Click here to view the full update and to access all previous IASB updates on this project.
Click here to listen to the IASB meeting audio playback.
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Next discussion by the IASB
The IASB will consider whether this project will remain on the agenda based on the feedback received from the agenda consultation process. In May 2012, the IASB decided to add Emission Trading Schemes to its agenda as a research project.
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Page last updated: 29 June 2011