Confusion over rules requiring accounting for carbon

News Article - 12 September 2008
Category: Environment

New rules under the Carbon Reduction Commitment (CRC), which will mean that accountants will have to start accounting for carbon, have raised questions.

Any business which qualifies for the CRC will be required to pay for their estimated carbon use in advance.

However, accountants are unsure as to whether the charge should be calculated as an asset, an expense or a tax, reports Accountancy Age.

Lynton Richmond, audit and assurance partner at KPMG, told the magazine that standard setters would have to help with carbon emissions reporting for businesses.

"How budgets are forecast and how to account for the CRC has to be on their to-do list for standard setters such as the ASB and IASB," he said.

KPMG warned last month that firms taking part in the CRC are likely to see a "significant" cash-flow impact from the scheme.

It advised its clients to begin carbon emissions measurement early so reliable forecasts of the impact could be formed.

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