Green Credit, Carbon Offset Accounting Clarified by US Board (1)

Companies gained specific direction for the first time Tuesday on how to account for environmental credits used to reduce their carbon footprints or meet regulatory requirements.

The Financial Accounting Standards Board published final guidance that aims to streamline how businesses report carbon offsets, renewable energy certificates, and other credits in their financial statements. The update fills a hole in the US accounting rulebook, which has lacked specifics on recognizing and measuring these credits.

The update “will provide clarity around accounting and disclosures that previously did not exist in environmental credits and related credit obligations,” FASB Chair Richard Jones said in ...