Accounting Issues and Climate Events

Qingliang Tang ()
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Qingliang Tang: Western Sydney University

Chapter Chapter 5 in Carbon Accounting and Sustainability, Volume I, 2025, pp 147-177 from Springer

Abstract: Abstract To prepare a relevant and useful financial statement, it is necessary to consider a wide array of difficult accounting issues. These accounting issues include the measurement of fair value, lease accounting, accounting for revenues from long-term contracts, accounting for income tax, and so on. It is crucial to explore how specific accounting issues are treated and implemented in the context of climate change. Despite the formal and established accounting, standards address core principles, and these standards have stood the test of time, they were formulated without the foresight of today’s environmental shifts. Further, the specific nuances associated with climate events are uncharted territories. With the emergence of governmental climate policies, corporate decarbonisation strategies, and the shift of market dynamics influenced by environmental factors, it’s essential to re-examine these issues and the related standards. This chapter navigates the complexities of these accounting issues and shed light on recognition and measurement of asset, liability, revenue, and expense, and the optimal presentation in financial statements in the new light of climate change. The discourse in this chapter aims to bridge the gap between traditional financial reporting practice and the pressing information needs of a climate-aware community of users and investors.

Keywords: Climate events; Accounting issues; Fair value accounting; Lease accounting; Accounting for income tax; Accounting for the exploration of natural resources; Accounting for agricultural assets; Financial instruments (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-031-90633-6_5

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DOI: 10.1007/978-3-031-90633-6_5

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