Research On The Accounting Recognition And Measurement Of Emission Rights In China Based On Property Rights Theory

With the gradual popularization of emission rihgts trading mechanism in ourcountry, more and more enterprises are involved in emission rights trading behavior.However, our accounting standards haven·t make any specific provisions aboutemission rights. And the international accounting bodies have not formed a unifiedstandard about the accounting treatment of emission rights. The accounting recognitionand measurement of emission rights has become a hot and difficult issue in accountingpractice.In this paper, the accounting recognition and measurement of emission rights arestudied based on the property rights theory. On the issue of accounting recognition ofemission rights, this paper first explores the real right attribute of emission rights froma legal perspective and then analyzes the property nature from the perspective ofeconomics. After that, the study has found it should be recognized as an asset from theviewpoint of accounting. Based on the different demand for real property and forfinancial property, the usage of emission rights held by an enterprise can be dividedinto two types: one is for production and operation and the other is for investment orleasing. These usages can be converted to each other. On this basis, emission rights canbe recognized as " intangible assets-emission rights " and " environmental assets forinvestment-emission rights." On the issue of accounting measurement of emissionrights, from the property rights protection-oriented view, this paper considers theaccounting measurement of emission rights should advocate fair value measurementmodel. The research shows that the use of fair value will make the reflection ofemission rights· value converge with economic value, providing the most relevantaccounting information for the information users. It will also help accounting achieveits functions of defining and protecting the property rights. Given the reality of ourcountry, it should allow the cost model and the fair value mo del to co-exist as atransition.There are two ideas throughout the full study on accounting recognition andmeasurement of emission rights. One is the idea of property rights theory, leading tothe analysis based on real property and financial property. The other is about thehomogeneity between emission rights and land use right, leading to the introduction ofthe idea of the accounting treatment of land use right in our accounting standards.These two ideas correspond to each other and form a coherent conclusion. That makesthis study stand in the height of property rights and escape the shackles of traditional accounting. It also make the conclustions of this study consistent with EnterpriseAccounting Standard in practical operational level. This paper presents a newperspective for the research on accounting of emissions rights. It also provides areference for the establishment of accounting standards in emission rights.