The Financial Accounting Standards Board (FASB) has finalized new guidance for how companies account for environmental credits, including carbon offsets and cap-and-trade allowances. These rules aim to provide much needed clarity and comparability for firms managing climate-related assets and liabilities under GAAP. Critics, including the Environmental Defense Fund, argue that requiring companies to immediately expense credits used for voluntary climate commitments creates a financial penalty. This could put U.S. firms at a disadvantage compared to international peers who use different accounting frameworks.
