As part of the good old PhD, I’m looking at some of the impacts of reporting changes around the adoption of IFRS in Australia upon audits. As part of this, I’m taking a look at accounting for the Emissions Trading Scheme – mostly because it’s interesting and topical.
The Australian Government has flagged an intention to create an emissions trading scheme, but has rather less-than-helpfully (in some ways) left the creation of accounting for its business impact to the International Accounting Standards Board. According to the IASB work program, an exposure draft regarding accounting for emissions trading scheme will be provided in the second half of 2009, and IFRS standards will be released in 2010. Alternative accounting models are to be brought to IASB in Q3 2008 (presumably, about now).
Rather less than conveniently, if IASB’s work program doesn’t slip, the new accounting standards will be released about the time the emissions trading scheme is implemented. Hmmm.
The project overview is provided here for IASB: emissions trading scheme.
However, the above seems to relate to how to account for the dollar impact of the scheme (presumably, accounting for assets and expenses created by the scheme etc). There is in addition a current reporting obligation under the National Greenhouse and Energy Reporting Act 2007. This is of course NOT the ETS, but it does give us some things to do right now. A copy of the guidelines for reporting obligations can be found on the government’s website.
By 2010, organisations that produce more than 50 kilotonnes of CO2 and/or use 200 terajoules of energy are subject to these requirements. There is an enormous scope of the non-accounting information that is required just in order to determine whether or not the corporation exceeds the threshold (see also this link: https://www.oscar.gov.au/Deh.Oscar.Extension.Web/Content/NgerThresholdCalculator/Default.aspx).
These reporting requirements appear to apply to at least government agencies, although it is uncertain whether State Departments (e.g. Queensland Health) are captured by these requirements. The advice for government agencies is that they should set up their systems to make this apply, and likely it will be made apply in any event due to the need for them to maintain a reputation.
A lot to absorb. By the way this blog is starting to creak under its own weight and desperately needs a redesign – I will redesign the categories and so on when I get a chance (so perhaps this is permanent).