The lack of a dedicated IFRS Accounting Standard for carbon-related instruments is undermining the market, according to a study from ACCA and the University of Glasgow.
It means there is growing complexity and diversity in how companies account for carbon-related instruments, which in turn causes confusion in the corporate reporting ecosystem.
The study, Reality of accounting for carbon-related instruments, examined the annual reports of 300 companies in high-emitting sectors across the globe.
University of Glasgow’s Dr Ioannis Tsalavoutas stressed: “Without guidance from standard setters, companies are developing their own accounting policies and providing information based on their own discretion. While the application of judgement when applying accounting policies is welcome, the use of substantially different accounting policies and different terms to describe these instruments, undermines transparency and comparability.”
Picture credit: NASA
