The forestry sector needs to make sure that the accountancy principles it adheres to are consistent, it has been claimed.
According to a recent report published by the Financial Accounting for Forestry Carbon Offsets (FAFCO), complex financial assets are being developed from environmental liabilities as a result of the economic incentives offered to firms which offset their carbon emissions.
Despite the financial benefits attached to packaging and trading these liabilities, which can be created by
financial accountants, FAFCO notes that both the International Accounting Standards Board (IASB) and the US Financial Accounting Standards Board (FASB) have supplied companies with no clear guidance as to how such entities "should account for voluntary emissions reductions, including forestry carbon offsets".
Commenting on the FAFCO report, a spokesperson form the Social Carbon Company told socialfunds.com: "Financial accounting methods are important for investors looking for the credibility of projects."
Recently, the UK's Environment Agency put forward new proposals that would see every person in Britain given annual carbon rations. People exceeding their limit would face financial penalties.
