The Financial Accounting Standards Board (FASB) has issued new guidance on how companies must account for carbon offsets and emissions allowances. These rules aim to provide much needed clarity and comparability for firms participating in cap-and-trade programs and voluntary climate initiatives. Key changes include requiring companies to recognize environmental credits as assets under specific conditions and treating the cost of obtaining credits as an expense. Public companies must comply with these standards for reporting periods beginning after December 15, 2027.
