# ASC 818-10-15: Environmental Credits and Environmental Credit Obligations — Overall — 15 Scope and Scope Exceptions

Source: FASB Accounting Standards Codification, Basic View

[Read online](https://asc.understandingaccounting.org/asc/818/10/#15-scope-and-scope-exceptions)

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## ASC 818-10-15: 15 Scope and Scope Exceptions

[Read section](https://asc.understandingaccounting.org/asc/818/10/#15-scope-and-scope-exceptions)

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##### [818-10-15-1](https://asc.understandingaccounting.org/asc/818/10/#818-10-15-1)

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Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:

[818-10-65-1](https://asc.understandingaccounting.org/asc/818/10/#818-10-65-1)The guidance in this Topic applies to all [environmental credits](https://asc.understandingaccounting.org/glossary/e/#environmental-credit "(P) December 16, 2027; (N) December 16, 2028818-10-65-1An enforceable right that is acquired, internally generated, granted by a regulatory agency or its designee(s), or received in a nonreciprocal transfer that is not a grant from a regulator or its designee(s) that meets all of the following criteria:Lacks physical substance and is not a financial asset.Is represented to prevent, control, reduce, or remove emissions or other pollution.Is, or previously was, separately transferable in an exchange transaction. If an item is no longer separately transferable in an exchange transaction, an entity must be able to use that item to satisfy an environmental credit obligation to meet this criterion.Is not an income tax credit that may be used to settle an entity’s income tax liability, regardless of whether the entity has a tax liability or intends to use the credit for that purpose.An environmental credit that meets the above criteria may exist in a variety of forms, including (but not limited to) credits, certificates, allowances, and offsets.") and [environmental credit obligations](https://asc.understandingaccounting.org/glossary/e/#environmental-credit-obligation "(P) December 16, 2027; (N) December 16, 2028818-10-65-1A regulatory compliance obligation arising from existing or enacted laws, statutes, or ordinances represented to prevent, control, reduce, or remove emissions or other pollution that may be settled with environmental credits. Obligations within the scope of Subtopic 410-30 are not environmental credit obligations.").

##### [818-10-15-2](https://asc.understandingaccounting.org/asc/818/10/#818-10-15-2)

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Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:

[818-10-65-1](https://asc.understandingaccounting.org/asc/818/10/#818-10-65-1)See paragraph [818-10-55-1](https://asc.understandingaccounting.org/asc/818/10/#818-10-55-1) for implementation guidance on the application of the scope of this Topic.

#### Other Considerations

##### [818-10-15-3](https://asc.understandingaccounting.org/asc/818/10/#818-10-15-3)

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Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:

[818-10-65-1](https://asc.understandingaccounting.org/asc/818/10/#818-10-65-1)Environmental credits and environmental credit obligations that are within the scope of this Topic are outside the scope of Topic 815 on derivatives and hedging in accordance with paragraph [815-10-15-82B](https://asc.understandingaccounting.org/asc/815/10/#815-10-15-82B).