3.1. Definition

Unlike financial accounting where most of the input can be reliably estimated, carbon accounting will rely on a substantial amount of assumption and estimated, as well as key judgment from the reporting entity.

Theses assumption and estimate will be related to input data with respect to paid and unpaid-carbon emission, fair value assumption with respect to available technology, or even carbon price itself.

Unlike financial accounting the intention is here is not to provide with a true and fair view of the financial position of the reporting entity, but to provide a tool that will allow the user to quantify the exposure of a given entity to the carbon economy.

Carbon assets, carbon liabilities, and carbon equity which are defined in theses principle do not meet the standard of GAAP asset, liability, or equity, among other reason, because they are hard to precisely estimate.

3.2. Disclosure

The reporting entity will disclose to the users as much as reasonably practical all the information needed for it to understand where and to what extend assumptions, judgement and estimates have been used by the reporting entity.

This will include at least the following information:

• The value and source of carbon price used for the value of the asset and liability in this report,
• The assumptions made in the fair value of the Embedded Carbon Asset,
• The input from the GAAP accounting used in the Carbon Accounts (if any),
• The assumption made for the lack of reusability of each Embedded Asset.