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Final stage

Following its discussions in November 2010 about some of the accounting issues arising from emissions trading schemes and some possible approaches to resolve those issues, the Board suspended this project to allow it to focus on higher priority projects and pending completion of its project to revise the Conceptual Framework for Financial Reporting. Consequently, this project is closed.

In 2015, the Board started a new research project titled ‘Pollutant Pricing Mechanisms’.


In December 2004 the Board issued IFRIC 3 Emission Rights. This was intended primarily to address the accounting for cap and trade emissions trading schemes, with an acknowledgement that it may be relevant to other types of schemes. However, IFRIC 3 was withdrawn in 2005 because many did not think that the accounting mismatches that it created, both in recognition and measurement bases, were appropriate.

After the withdrawal of IFRIC 3, the Board initiated a new project to find a better solution. This project again focused on cap and trade schemes and identified some complex issues about what the assets and liabilities in the scheme were, when to recognise them, and how to measure them when the entity receives emission allowances from the scheme administrator for no monetary consideration. However, many issues in the project were not discussed before the project was suspended.