The Australian Accounting Standards Board (AASB) has hosed down calls from peak accounting body CPA Australia for the urgent development of new financial reporting standards for emissions trading.
The CPA warned the AASB and the Auditing and Assurance Standards board that the quality of financial reporting would suffer if Prime Minister John Howard’s scheme went ahead without new standards.
It said potential volatility in financial reporting would be caused by a mismatch of assets and liabilities.
“Under the current standards, it’s not clear how organisations would account for emissions,” CPA Australia chief executive Geoff Rankin said.
“This uncertainty is a significant issue.for example some organisations will show carbon credits as a neutral position, while others will show them as a gross position,” Rankin said.
“This means that users of financials such as shareholders and analysts would be comparing apples with oranges, as financials would not be comparable.”
CPA Australia senior policy adviser Mark Shying said it usually takes three to four years to develop an accounting standard.
But AASB chairman David Boymal said it was too early to work on setting standardswithout further details of the scheme and CPA Australia was being opportunistic.
“CPA seems to imply there’s some terrible urgency with this – I don’t see there is urgency,” Boymal said.
“The emissions trading scheme announced by the PM is not intended to be introduced until 2012. The details will be out around 2011
“The need for an emissions standard depends on what the details are. It really doesn’t make a lot of sense before that is in place.”
The Prime Minister Howard has set up a taskforce to work towards full-scale emissions trading to offset climate change.
Labor has pledged to get the scheme running by 2010.
Australia’s first carbon trading scheme, the Australian Climate Exchange, opened on Monday.
