Entry for carbon credit certifiacte

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Dear all  "one of my clint company has got them selves a carbon credit certificate on account of efforts put by them on  reducion of carbon dy oxide .now pls tell me accounting treatment together with enty & heads under which it will fall."

Replies (2)

Actually, Carbon Credit Certificates are Intangible Assets as they are identifiable, Non-monetary Assets & having no physical substance. Hence, AS-26 is applied on it.

Any Intangible Assets is recorded, if and only if, following 2 conditions are satisfied:-

1. That Assets gives future economic benefit to the Company; and

2. The Cost of Assets can be measured reliably.

 

In you case, as the value of assets is not identified, Hence, it is valued at nominal value or nil value. 

Entry:-   Carbon Credit Certificate A/c   .....Dr.                              To Revaluation Reserve / Profit &                               Loss A/c

 

Note: I think, Using Revaluation Reserve is much better......

Hi Suman,

If carbon credit certificate is gained through putting own efforts then...

 

Carbon Credit Certificate A/c                               Dr.             XXX

          To Carbon Credit A/c                                                                  XXX

Logic :

1st, Carbon Credit A/c is separate a/c which gets debited when carbon is emitted by the entity.

 

Then, when we get Carbon Credit Certificate by gaining credit, we get intangible asset in the form of Certificate. So, Carbon Credit A/c is credited & Certificate A/c is debited.

 

(This is my understanding... Please leme know if I am wrong & also inform what you did for the same.)

 

 

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