2002 Fiscal Year Final Research Report Summary
Emission Trading : Management, Financial Strategy and Accounting issues
| Project/Area Number |
12630157
|
|---|
| Research Category |
Grant-in-Aid for Scientific Research (C)
|
| Allocation Type | Single-year Grants |
|---|
| Section | 一般 |
|---|
| Research Field |
Accounting
|
|---|
| Research Institution | Nihon University |
|---|
Principal Investigator |
MURAI Hideki Nihon University, College of Commerce, Associate Professor, 商学部, 助教授 (60219871)
|
|---|
| Project Period (FY) |
2000 – 2002
|
| Keywords | Emission trading / Type of acquiring emissions allowances / AAU(assigned amount unit / CER(certified emission reduction) / ERU(emission reduction unit) / derivatives / GHG market / Accounting for emission trading |
|---|
| Research Abstract |
There are three types of emission allowances, 1)AAU(assigned amount unit), 2)CER(certified emission reduction), 3)ERU(emission reduction unit). We think about three cases for consumption purposes of emission trading.
a)Cases that recognize earnings received by using a fair value amount when acquiring emissions allowances by free allocation. b)Cases that do not recognize earnings received by using a fair value amount when acquiring emissions allowances by free allocation. c)Cases that do not make any journal entries when acquiring emissions allowances by free allocation. And each case is divided into five situations. (i)At time of acquisition, (ii)At time of consumption, (iii)At time of sale, (iv)At time of lapse, (v)End of period valuation.
We would like to show some cases as follows.
□Case a)-(i)
(Debit)Emissions allowances
(Credit)Profit increase received
<Explanation>Assets received are booked at a fair valuation amount. Grounds for booking earnings are conversion of the assets to an expense when they are consumed.
□Case b)-(i)
(Debit)Emissions allowances
(Credit)Emissions allowances offset entry
<Explanation>Assets received are booked at a fair valuation amount. Reasons for not booking earnings include tax aspect considerations or not recognizing company profits (results)
□Case C)-(i) No journal
<Explanation>No journal created because assets received for free. However, emissions volume and emissions allowances are handled on an off-the-books basis
And we thought of speculative purposes of emission trading. In this case, there are two categories, 1) Acquisition and 2) sales.
We would like to think about making rules of emission rights in consideration of "Accounting for derivatives" and "Hedge accounting".
|
