Comment: Environmental credits and credit obligations

In our letter responding to the FASB’s proposal on accounting for environmental credits and environmental credit obligations, we express our support for the proposal and believe that it provides much-needed guidance on how to recognize and measure environmental credits and obligations resulting from regulatory compliance programs. Currently, assets are generally accounted for by analogizing to either an inventory model in ASC 330 or an intangible asset model in ASC 350, while liabilities are accounted for by analogizing to ASC 410-30 or ASC 450-20. The proposal would introduce new guidance: ASC 818-20 on environmental credits and ASC 818-30 on environmental credit obligations. We believe the proposal would reduce diversity in practice, improve the comparability of financial statements and enhance the disclosures for environmental credits and environmental credit obligations.

Download our letter to read our comments in full.