Utility companies participating in the EU emissions trading scheme (ETS) have
been left without any clear guidance on how to account for carbon emissions
since June this year.
FTSE100 group Centrica revealed last week, that because of a lack of
‘definitive guidance’, it had gone ahead and adopted its own treatment for the
‘Given the fact that there is no guidance, we have returned to underlying
accounting principles and aimed to provide a clear and transparent picture of
our position,’ a Centrica spokesman said.
IFRIC, the IASB’s interpretive arm, produced a treatment for the ETS last
year, but the European Commission asked the board to remove it because it
created mismatches between assets and liabilities.
This has left companies to soldier on alone when deciding how to reflect
changes to accounts caused by emissions quotas, which have soared in value from
7 euros (£4.70) per allowance at the start of the year to more than 20 euros.
Richard Gledhill, head of climate change services at PricewaterhouseCoopers,
said the lack of guidance could complicate comparisons between utility
‘There are a range of options for accounting for emissions and the
consequences are that comparisons will be more difficult between companies using
different measures,’ said Gledhill.
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