Polluter Corp

Under IFRS, activities related to purchase/sales of intangible assets result in investing activities. The reasons are similar to the reasons under U.S. GAAP. Therefore, even though there are several treatments to deal with the EAs, the purchase of additional EAs and the sale of excess EAs by Polluter Corp are all classified as investing activities.

In 1973 the Financial Accounting Standards Board (FASB) was established to set the financial accounting standards in the United States of America for nongovernmental entities. These standards are collectively called U.S. Generally accepted Accounting Principles, or U.S. GAAP. The Securities and Exchange Commission (SEC) and the American Institute of Certified Public Accountants acknowledge the authority of these standards (FASB, n.d). A “proven, independent due process” is used to collect the viewpoints of the financial statements prepares and users for the constant improvement of these standards. An Accounting Status Update(ASU) is not an authoritative source however documents the amendments to communicate the changes in the FASB Codification for a user to understand the reason and future of those changes (FASB, n.d).

The purpose of this research paper is to summarize research on codification topic 410 based on the information found in different academic databases. The first part of the paper will focus on the FASB Codification database. The second part of the paper will compare and contrast three other databases on the same codification 410 within the RIA Checkpoint databases: AICPA: Auditing and Accounting Guides, SOX Reporter, and GAAP Practice Manual. A summary of benefits and issues with the searches of each database will also be discussed.

Considering reporting entities, the Statement of Financial Accounting Standards No. 94 best defines and prescribes the recommended treatment. For example, the Statement of Financial Accounting Standards prescribes that consolidated reporting is the only appropriate method to report.

The FASB accounting codification is an advanced system that allows certified public accountants and other users to quickly access non-SEC authoritative content, perform relevant research, and submit timely and appropriate feedback. The FASB codification research system is a real-time, online database that allows users to access codification whose primary aim is to simplify the accessibility and structure of all authoritative generally accepted accounting principles, reduce the time and effort invested when researching accounting-related issues, decrease the risk of non-compliance with the generally accepted accounting principles, provide access to all authoritative information from a single place, facilitate the updating of accounting standards, and foster research and convergence efforts for the FASB (Wiley, 2017).

The FASB Codification provides guidance on how to classify monetary and nonmonetary assets and liabilities. For typical circumstances it suggests using a classification table, and for non-typical circumstances Codification guides to refer to the definitions. To begin with, let us appeal to the definition of “inventory”. The term inventory embraces goods awaiting sale (the merchandise of a trading concern and the

As the business environment grows and companies find new ways to expand into their respective - or even new – markets, it is important that reporting standards stay up to date with changes and continue to assist companies in providing their users with useful accounting information. Information is labelled as being useful when it meets the

After numerous complaints from citizens about the overwhelming pollution in the United States, Congress decided to pass both the Clean Air Act and the Clean Water Act in order to protect America’s environment and its citizens. Through the tight restrictions placed on businesses in these acts, Congress hoped that the pollution put out by large industries would decrease and its affect on the lives of everyone in the United States would lessen. Under the Clean Air Act, cities, businesses, and automobiles must meet air quality standards and follow provisions created by the Environmental Protection Agency. Under the Clean Water Act, businesses must have licenses to release certain pollutants and national water quality standards must be met. The Clean Air and Water Acts are extremely effective, therefore, it was necessary the government create them. These acts have helped drastically decrease the pollution in America and have improved the health of citizens as well as the environment.

The Codification’s goal is to clarify the company of thousands of U.S. authoritative accounting announcements published by diverse standard-setters. Therefore, to accomplish this objective, the FASB sponsored a project to incorporate and typically adapt all related accounting publication announced by the standard-setters of the U.S. in conjunction with those of the FASB, the Emerging Issues Task Force (EITF) and the American Institute of Certified Public Accountants

This amendment allowed the government to enforce the cap and trade on specific companies and established the allowances market to commodify emissions. By treating emissions as a commodity, businesses are able to trade and sell allowances to either stay within regulations or gain revenue by being more efficient than others. The EPA’s first phase began in 1995 with the enforcement of 110 companies to reduce emissions, and the second phase was to include coal burning power plants. Overall, this led to a decrease by 41% of emissions compared to the 1980s. The ability of the government to enforce these cap and trade policies as well provide the public with a clear understanding of the ramifications of acid rain is a clear projection of the credibility of the science being put forth.

Therefore, cap-and-trade, a market-based mechanism, allowed a process for business to buy and sell the right to pollute (Lawrence & Weber, 2017) as the EPA, with the Clean Air Act of 1990, placed a national cap on emissions of sulfur and nitrogen oxides (Allen & Yago, 2011). Ultimately, the cap-and-trade system created incentives to explore ways to reduce sulfur dioxide emission by taking advantage of low-cost abatement options. Subsequently, if annual emissions exceeded the allowances allocated to that facility, the CEO may purchase allowances from another company or reduce emissions by installing pollution controls through the cap-and-trade program (Schmalensee & Stavins,

Emissions allowances are considered intangible assets in accordance with IAS 38. Paragraph 10 of IAS 38 describes that an asset is intangible if it holds, “identifiability, control over a resource and existence of future economic benefits. “ Identifiability, is defined in Paragraph 12(b), which states, “an asset is identifiable if it is separable, i.e., is capable of being separated or divided from the entity and sold, transferred…” EAs match this criterion for they can be sold and purchased between companies. Paragraph 13 defines control as “the power to obtain the future economic benefits flowing from the underlying resource and to restrict the access of others to those benefits. “ Columbia Corporation has the ability to strictly retain the benefit of EAs if they so chose. Finally, Paragraph 17 states, “the future economic benefits flowing from an intangible asset may include revenue from the sale of products or services, cost savings, or other benefits resulting from the use of the asset by the entity. “ EAs have the ability to provide all these benefits. If sold, they could provide revenue. If bought or used efficiently, EAs could save money by decreasing an

The EU ETS has been known exist with a typical weakness. On April 16th the European Parliament voted to reject an attempt to bolster Europe’s flagship environmental programme, the Emissions Trading System (The economist, 2013), mainly because of the exceeded limit of emission. Carbon has been known to harm the globe, and no wonder there is a price to it. During Phase 1 (2005-2007) of the EU ETS, there had been a massive overcapacity in the carbon market (The economist, 2013). Companies were being allocated allowances based on previous emissions and not being auctioned; while auction remains a more efficient way to allocate emission allowances creating a carbon market. (Mak, 2011). The surplus was 1.5 billion – 2 billion tones or about a year’s emissions (The economist, 2013). This shows how the newborn phase 1 were victims of the first mistakes made by the EU ETS. Countries such as Germany, France and Poland were furthermore assigned additional allowances thus not respecting the restrictions of the ETS (Mak, 2011), also, not complying with the Harmonisation Law; which aims to create a consistency of laws and regulations in the business so that one country does not obtain an economic advantage as a result of difference rules (Harmonisation of

The EU ETS cap allowance gives the owner of company to emit one tone of CO2 (each allowance can used only one time). Moreover, cap gives EU companies chance to buy or receive emissions allowance if they want to trade. In addition, from 2013, the cap will be making change by reduce emission about 1.74% every year from power plants and installations. That means GHG emission in 2020 will be reduce around 21% compared to 2005 (European Communities, 2013).

1 This Standard shall be applied in accounting for revenue arising from the following transactions and events: (a) (b) (c) 2 3 4 the sale of goods; the rendering of services; and the use by others of entity assets yielding interest, royalties and dividends.