The International Accounting Standard Board

In this article Allan Cook examines the efforts of the International Accounting Standard Board to regulate the problems associated with new Emission Rights Scheme under the Kyoto protocol. Trading scheme is rather attractive for the government, but accountants are faced up with difficulties created by new emission rights as they simply fail to respond to existing standards.

The central argument is that emission reduction is effective way to give a cost to costless activity. The author employs critical analysis and description methods to discuss emission reduction schemes as an effort to give a cost to costless activity.

The author’s purpose is to challenge the perception of accounting systems and to present pros and cons of New Emission Scheme for the government and accountants. The author supports all the arguments posted with statistics from the International Accounting Standards Board. The focus of the articles is on key instruments to control emissions – ‘base line and credit’ and ‘cap and trade’. The author defines ‘base line and credit’ system as the system under which allowances are allocated by the government, whereas ‘cap and trade’ system is defined as a system under which cost for entities are mitigated by government for the given period.

The article is useful to my research topic as Cook suggests that emission reduction schemes are designed to motivate producers to monitor and control emissions as well as regard them as an input cost. The main limitation of the article is that research issue is restricted to understanding by limited circle of professionals and specialists. The author indicates that more extensive research is needed in the field of emission reduction. The article will not form the basis of my research; however, it will be useful supplementary information.