Accounting Plan Offers Companies More Clarity on Green Credits

Businesses are set to get guidance for the first time on how to account for the value of and costs to obtain environmental credits they use to reduce their carbon footprints or meet regulatory requirements.

The Financial Accounting Standards Board released a draft plan on Tuesday that aims to standardize how companies record renewable energy certificates, carbon offsets, or cap-and-trade programs on their financial statements. The plan also seeks to provide investors with more information on companies’ involvement in these environmental credit programs, such as the nature and type of credits and related liabilities. The proposal does not include the ...