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KPMG provides CRC accounting guidance

Participants will have to purchase allowances for every tonne of carbon generated by energy usage at sites they control. Allowances will initially cost £12 per tonne of carbon.

Vincent Neate, KPMG’s head of Climate Change & Sustainability, said, ‘At present there is no authoritative accounting guidance within the International Financial Reporting Standards or the UK Generally Accepted Accounting Practice explicitly for transactions involving carbon allowances, but now that this cost is a known entity it is sensible to account for it in line with an organisation’s existing accounting principles.

‘Although the Spending Review has delayed the scheme’s impact on cash flow, the accounting treatment of the cost should be addressed now. As the CRC now operates in a very similar way to the CCL, though paid at the end of the CRC year rather than with each energy bill, we recommend organisations consider treating the two in a similar way in the accounts.’

For more information on ongoing CRC compliance, visit Carbon Clear's guide to creating a CRC Evidence Pack.