Accounting For Carbon Emission Rights Trading

To cope with global warming,low carbon emission reduction is the only choice for human beings.The carbon emission trading system,which originated from the emission right,can translate environmental protection achievements into economic benefits and is the most important measure for energy conservation and emission reduction.As a major emitter of greenhouse gases,China has also shown its responsibility by signing the climate change convention and establishing and developing a carbon emission trading market.In recent years,China’s carbon market has been booming on the whole.With the formal construction of the national unified carbon market,it is foreseeable that China’s carbon trading business will increase several times in the future.Many aspects of carbon emission trading activities will affect corporate finance,but in sharp contrast to the rapid growth of the carbon market,China has not introduced a formal accounting system for many years.Therefore,the practical treatment of China’s enterprises presents diversity and randomness,and the accounting information among enterprises is lack of comparability.At the end of 2019,the Ministry of Finance issued the Interim Provisions on accounting treatment for carbon emissions trading(later referred to as "interim provisions")to fill the gap of this system,but it simplifies all businesses and weakens the financial attribute of carbon emission rights.With the strengthening of enterprise carbon asset management,the rise of carbon finance and the construction of a single market,the interim provisions need to be further revised in the future.In this paper,by combing the viewpoints of domestic and foreign scholars,relevant accounting systems in various countries and the practical treatment of listed emission control enterprises in China,various treatment methods of carbon emission trading are obtained.Then select Tabai Group,a cement industry Emission control enterprise in Guangdong province,as the case study.By sorting out the carbon emission rights business and the current accounting treatment of Tapai Group,and comparing the impact of various treatment methods on the financial status and performance of the enterprise,the problems existing in the accounting treatment of Tapai Group are found.According to the comparison results,some Suggestions are put forward to design a carbon emission right accounting system which is more suitable to its actual situation.The main conclusions are as follows: In terms of accounting recognition,free quota can bring income before performance,which is in line with the definition of assets.However,in order to avoid the false increase of assets,it should be confirmed with the nominal amount.The quota can set up a new "carbon emission right" subject according to the current domestic mainstream view,but should set up a detailed subject according to the source and the purpose of holding different.At the same time,it should pay attention to the recognition of carbon liabilities.In terms of accounting measurement,if the market where the enterprise is located is active and reliable fair value can be obtained,the carbon assets and carbon liabilities shall be measured at fair value,except for the part recognized by the nominal amount.In terms of accounting report,due to the wide range of users of carbon emission right information,it should be adopt on balance sheet presentation and off balance sheet disclosure,especially pay attention to the changes in quantity and value.Finally,combining with the case conclusion and the development situation and trend of China’s carbon market,this paper puts forward some Suggestions for the next revision of the interim provisions.