Companies to Get Green Credit, Carbon Offset Accounting Clarity

Companies using renewable energy credits, carbon offsets, or cap-and-trade programs to reduce their carbon footprint or meet regulatory requirements would get formal guidance on how to report them in their financial statements under a proposal US accounting standard-setters will release by year end.

“There’s diversity in practice today; these rules will address that,” Financial Accounting Standards Board member Joyce Joseph said, adding the board is “filling a hole in GAAP,” referring to generally accepted accounting principles. Board members voted unanimously Wednesday to release the proposal.

Businesses increasingly use credits and offsets to blunt the impact of their emissions, but no ...