1. Introduction

Since carbon emissions are currently not specifically priced, it does not yet represent part of the acquisition cost of assets. As such, it is currently not accounted for under e.g., International Financial Reporting Standards (IFRS), US or local generally accepted accounting principles (GAAP).

The purpose of this document is to describe accounting policies and procedures for carbon accounting. It provides an initial framework to monitor the resource consumption. While it has been structured and designed with real estate in mind, it could be extended to any other asset/product.

It represents a carbon “accounting” logic, although in this case accounting does not mean a presentation of transactions according to national or international accounting standards. The following policies and procedures have been developed for the sake of efficient and economic management of the operational and embedded carbon.

It is neither practical nor achievable to anticipate all potential cases upfront or to provide guidelines that deliver completely prefabricated answers. As such the framework focuses on a rule-based approach presented in this manual, which allows to address situations that may arise in the normal course of business. Nonetheless, it should be noted at this point, that the focus of the manual is on exemplary clarification of the accounting for carbon. Several terms and definitions used in this manual are similar to the wording of established International Financial Reporting Standard (IFRS) terms, as e.g. the terms asset and liability. However, it should be noted that the items described here do not fulfill the definition of the IFRS standards or its framework, and therefore should not be interpreted in a similar fashion then within the framework of IFRS, or any other GAAP item.

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