(P) December 16, 2027; (N) December 16, 2028
818-10-65-1Before applying the subsequent measurement requirements of this Subtopic, an entity shall apply the asset recognition reassessment requirements in paragraph 818-20-40-2 at each reporting date. (P) December 16, 2027; (N) December 16, 2028
818-10-65-1An entity shall subsequently measure similar environmental credits recognized as assets using one of the following costing methods: - a
Average cost
- b
First-in, first-out
- c
Specific identification.
(P) December 16, 2027; (N) December 16, 2028
818-10-65-1An entity shall determine at each reporting date whether it is probable that an environmental credit recognized as an asset will be used to settle an environmental credit obligation. If it is probable, the environmental credit shall be classified as a compliance environmental credit and shall not be subsequently remeasured. (P) December 16, 2027; (N) December 16, 2028
818-10-65-1All other environmental credits recognized as assets shall be classified as noncompliance environmental credits and tested for impairment at each reporting date. An entity shall recognize an impairment loss when the carrying value of the noncompliance environmental credit exceeds its fair value. The impairment loss shall be measured as the excess of the carrying value over fair value. Subsequent reversal of a previously recognized impairment loss is prohibited. (P) December 16, 2027; (N) December 16, 2028
818-10-65-1If an environmental credit is reclassified from a compliance environmental credit to a noncompliance environmental credit or vice versa, an entity shall apply the impairment requirements in paragraph 818-20-35-4 before applying the subsequent measurement guidance related to the new classification of the environmental credit. (P) December 16, 2027; (N) December 16, 2028
818-10-65-1An entity shall not amortize an environmental credit. (P) December 16, 2027; (N) December 16, 2028
818-10-65-1Notwithstanding the requirements of paragraphs , an entity may elect an accounting policy by class to subsequently measure a class of eligible (see paragraph 818-20-35-9) noncompliance environmental credits at fair value at each reporting date, with changes in fair value recognized in earnings. An entity should determine what constitutes a class based on its specific facts and circumstances. (P) December 16, 2027; (N) December 16, 2028
818-10-65-1An environmental credit subsequently measured at fair value in accordance with paragraph 818-20-35-7 shall continue to be measured at fair value at each reporting date until that environmental credit is derecognized. See paragraph 818-20-55-8 for implementation guidance on the application of this paragraph. (P) December 16, 2027; (N) December 16, 2028
818-10-65-1To be eligible for subsequent fair value measurement, a noncompliance environmental credit shall be obtained through one of the following: - a
- b
- c
See paragraph 818-20-55-7 for implementation guidance on the application of this paragraph. (P) December 16, 2027; (N) December 16, 2028
818-10-65-1A change in accounting policy to elect fair value measurement shall be subject to the guidance in Topic 250 on accounting changes and error corrections, including the requirements related to a change in accounting policy in an interim period in paragraphs . However, notwithstanding the requirements of paragraph 250-10-45-5, an entity that elects to change its accounting policy to subsequently measure a class of eligible noncompliance environmental credits at fair value shall apply that fair value measurement accounting policy prospectively, with a cumulative-effect adjustment to retained earnings as of the beginning of the annual reporting period in which the change is made. The change shall not be retrospectively applied to prior annual reporting periods. The adjustment to retained earnings shall be determined in accordance with Topic 250 and shall include the difference between the fair value and the carrying amount of all affected noncompliance environmental credits at the beginning of the annual reporting period in which the fair value measurement accounting policy change is made. The initial adoption of an accounting policy for a class of eligible noncompliance environmental credits is not a change in accounting policy subject to the guidance in Topic 250.