# ASC 818-20-50: Environmental Credits and Environmental Credit Obligations — Environmental Credits — 50 Disclosure Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/818/20/#50-disclosure) Study and research edition. Verify current requirements with the official source. Summaries, enrichment, and tags are machine-generated study aids. Paragraph html preserves source markup; snippet is abbreviated. Pending content is not necessarily effective. Tables and mathematical or amendment markup are retained as HTML where Markdown would lose structure. Source downloaded (UTC): 2026-09-10T01:42:28.544Z to 2026-09-10T01:42:28.544Z Record version: sha256:ca1e0068820a1de92f49f16357f7e066f68d3a41fb40576d23128957267c0b1c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 818-20-50: 50 Disclosure [Read section](https://asc.understandingaccounting.org/asc/818/20/#50-disclosure) SEC content: no ##### [818-20-50-1](https://asc.understandingaccounting.org/asc/818/20/#818-20-50-1) Pending content: yes Source downloaded (UTC): 2026-09-10T01:42:28.544Z to 2026-09-10T01:42:28.544Z Record version: sha256:e7beb73dad9e353edffc2426ed8652e70f1c4a21b366fb9644ab61072cddd76e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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)For annual reporting periods, an entity shall disclose the types of [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.") owned by the entity and all of the following: 1. a How the entity obtained the environmental credits (acquired, granted, internally generated, or received in a [nonreciprocal transfer](https://asc.understandingaccounting.org/glossary/n/#nonreciprocal-transfer "Nonreciprocal transfer is a transfer of assets or services in one direction, either from an entity to its owners (whether or not in exchange for their ownership interests) or to another entity, or from owners or another entity to the entity. An entity's reacquisition of its outstanding stock is an example of a nonreciprocal transfer.")) 2. b How the entity intends to use the environmental credits (to settle [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."), to transfer in an [exchange](https://asc.understandingaccounting.org/glossary/e/#exchange "An exchange (or exchange transaction) is a reciprocal transfer between two entities that results in one of the entities acquiring assets or services or satisfying liabilities by surrendering other assets or services or incurring other obligations.") transaction, to use in a nonreciprocal transfer, or to meet voluntary environmental initiatives) 3. c The accounting policies used to account for the environmental credits in accordance with Topic 235 on notes to financial statements (for example, whether the environmental credits are subsequently measured using the average cost; first-in, first-out; or specific identification costing methods) 4. d Significant estimates and judgments used in applying the guidance. ##### [818-20-50-2](https://asc.understandingaccounting.org/asc/818/20/#818-20-50-2) Pending content: yes Source downloaded (UTC): 2026-09-10T01:42:28.544Z to 2026-09-10T01:42:28.544Z Record version: sha256:908d9636e460e2ffffa0308931ba0ce4cbcead312400421158133431756b173a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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)For annual reporting periods, an entity shall disclose, if not separately presented on the entity’s balance sheet, the current and noncurrent assets portion of both of the following: 1. a [Compliance environmental credits](https://asc.understandingaccounting.org/glossary/c/#compliance-environmental-credit "(P) December 16, 2027; (N) December 16, 2028818-10-65-1An environmental credit recognized as an asset in accordance with Topic 818 and probable of being used to settle an environmental credit obligation.") 2. b [Noncompliance environmental credits](https://asc.understandingaccounting.org/glossary/n/#noncompliance-environmental-credit "(P) December 16, 2027; (N) December 16, 2028818-10-65-1An environmental credit recognized as an asset in accordance with Topic 818 that is not a compliance environmental credit."). An entity also shall disclose the line item or items on the balance sheet that include the current asset and noncurrent assets portion of the amounts in (a) and (b). ##### [818-20-50-3](https://asc.understandingaccounting.org/asc/818/20/#818-20-50-3) Pending content: yes Source downloaded (UTC): 2026-09-10T01:42:28.544Z to 2026-09-10T01:42:28.544Z Record version: sha256:c75a0527558f9d2a91bab424771402a50534d78864201dba7ec3f0f40123c609 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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)For annual reporting periods, an entity shall disclose all of the following: 1. a Total expense recognized for environmental credits not initially recognized as an asset in accordance with paragraph [818-20-25-1](https://asc.understandingaccounting.org/asc/818/20/#818-20-25-1) or subsequently derecognized in accordance with paragraph [818-20-40-2](https://asc.understandingaccounting.org/asc/818/20/#818-20-40-2). 2. b Total impairment expense recognized during the reporting period, the nature of the environmental credits that were impaired, and a description of the facts and circumstances giving rise to the impairment. 3. c The line item or items in the income statement that include the amounts in (a) and (b). See paragraphs [220-40-50-21 through 50-25](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-21) for additional disclosure requirements. ##### [818-20-50-4](https://asc.understandingaccounting.org/asc/818/20/#818-20-50-4) Pending content: yes Source downloaded (UTC): 2026-09-10T01:42:28.544Z to 2026-09-10T01:42:28.544Z Record version: sha256:24ad6af7f818138f5766e28e03a3f0cf24de4837b60315b8a6d0a5a07ac1875b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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)For annual reporting periods, if as a result of applying the guidance in paragraphs [818-20-35-3 through 35-4](https://asc.understandingaccounting.org/asc/818/20/#818-20-35-3) and paragraph [818-20-40-2](https://asc.understandingaccounting.org/asc/818/20/#818-20-40-2) an entity changes its use or intended use of its environmental credits, it shall disclose the nature of that change as of the date that it occurs and the related effect on earnings on that date, if any. ##### [818-20-50-5](https://asc.understandingaccounting.org/asc/818/20/#818-20-50-5) Pending content: yes Source downloaded (UTC): 2026-09-10T01:42:28.544Z to 2026-09-10T01:42:28.544Z Record version: sha256:277294329a5f3416d0cda9e3ca1c99208dda828eb6acf624a59147e664e46906 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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)An entity shall apply the [fair value](https://asc.understandingaccounting.org/glossary/f/#fair-value "The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.") disclosure requirements in Topic 820 for any fair value measurements made in accordance with this Subtopic. ##### [818-20-50-6](https://asc.understandingaccounting.org/asc/818/20/#818-20-50-6) Pending content: yes Source downloaded (UTC): 2026-09-10T01:42:28.544Z to 2026-09-10T01:42:28.544Z Record version: sha256:532b91d227b35170aca2c679b96ac867e9f01397a88814bd8d91a13cdecf1a1c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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 [818-20-55-14](https://asc.understandingaccounting.org/asc/818/20/#818-20-55-14) for an illustration of the quantitative disclosures required by this Subtopic.