carbon credit accounting

Link
India set to be world’s first country with carbon credit accounting rules Accountants are having a tough time taking stock of the green economy. On July 1, India Inc was to move to a standard accounting system for carbon credits—units that offset greenhouse gases under the Kyoto Protocol and that have suddenly emerged as big business for Indian companies. But ICAI—the country’s nodal agency for all accounting rules—and Indian corporates are at disagreement whether to treat carbon credits as ‘inventory’ or ‘financial instruments’. Companies argue that if it is treated as inventory, it will be hit by the vagaries of mark-to-market rules. While this has led to uncertainty and further delay, ICAI’s accounting standards board is set to urgently meet to sort this matter out once and for all. The silver lining: India is emerging to be the first country to put in place accounting rules for carbon credits.