2 May 2013 - CDSB, IETA and international academics called for clarification of financial accounting rules for emissions trading and offer to provide practical support.
In response to a consultation by the European Financial Reporting Advisory Group (EFRAG), CDSB, IETA and distinguished academics have expressed their wish to see clarification of financial accounting rules for emissions trading for the following reasons:
- There is significant divergence in accounting practices for emission allowances across Europe and internationally, making it difficult to compare financial statements;
- There is evidence that account preparers and users would welcome clarity on emission allowance accounting rules : stakeholders would respond promptly to due process requirements because they want to have a resolution;
- The International Accounting Standards Board (IASB) and Financial Accounting Standards Board (FASB) have already done a considerable amount of work on the Emission Trading Schemes project, joined more recently by the French Accounting Standard setter (ANC) 2012, and thus it would make sense to resolve the issue and bring it to completion. It should be possible to come to agreement relatively quickly and it will provide a solid basis for work on related climate change and integrated reporting issues, which will become more important to IASB’s remit over the next ten years. The CDSB and IETA are willing to provide practical support and help to EFRAG and IASB, for example through drawing on our networks to commission research, and/or drafting and testing voluntary guidance;
- Clarification of rules demonstrates the financial accounting sector’s commitment to the public interest, and the need to give tangible presence to what is still a poorly formed emissions trading market.
CDSB welcomed the opportunity to respond to the consultation and hopes to continue working together with EFRAG and other stakeholders on bringing consistency and clarity to accounting for the EU ETS.