Statement on Accounting for Carbon Allowances from ESMA
Statement on Accounting for Carbon Allowances from ESMA
The European Securities and Markets Authority (ESMA) has released a publication titled 'Clearing the Smog: Accounting for Carbon Allowances in Financial Statements'. This statement aims to enhance financial reporting for issuers involved in carbon allowance programs.
It reviews the various accounting approaches observed in the financial statements of European listed issuers concerning carbon pricing programs.
ESMA encourages issuers to consider which IFRS Accounting Standards could be applied to account for carbon allowances in their financial reporting.
Additionally, it provides disclosure recommendations to improve decision usefulness for users by promoting transparency of the information included in the financial statements regarding carbon pricing programs.
The statement also addresses connectivity and the need for consistency between the assumptions used in estimations and measurements related to climate matters and the information presented across different sections of the annual financial report. It emphasises the need for issuers to carefully and consistently connect the information provided about carbon allowances in the financial statements with the disclosures required under the European Sustainability Reporting Standards (ESRS).
The full statement can be accessed here and the press release is available here.
It reviews the various accounting approaches observed in the financial statements of European listed issuers concerning carbon pricing programs.
ESMA encourages issuers to consider which IFRS Accounting Standards could be applied to account for carbon allowances in their financial reporting.
Additionally, it provides disclosure recommendations to improve decision usefulness for users by promoting transparency of the information included in the financial statements regarding carbon pricing programs.
The statement also addresses connectivity and the need for consistency between the assumptions used in estimations and measurements related to climate matters and the information presented across different sections of the annual financial report. It emphasises the need for issuers to carefully and consistently connect the information provided about carbon allowances in the financial statements with the disclosures required under the European Sustainability Reporting Standards (ESRS).
The full statement can be accessed here and the press release is available here.