Emission Rights Reporting by Czech Companies

Abstract

This paper is a part of broader research with analyzes whether there is a standardized approach to reporting of Emission Allowances in the Czech Republic or whether differences in reporting practices are considerable enough to request harmonization. So far, the research has shown that several different approaches related to recognition and reporting of Emission Allowance are present in financial statements of entities reporting both in accordance with Czech Accounting Standards and IFRS. This paper presents research results from analysis of financial statements of entities in the Czech Republic that are part of European Union Emissions Trading Scheme focused on Emission rights arising from Kyoto Protocol and analysis of information regarding those rights stated in the financial statements. The topic of environment protection gradually grows on importance and has recently become part of EU financial policy framework for sustainable finance. Therefore, examining the current state and identifying its possible shortcomings is necessary to anticipate possible reporting changes in the upcoming years. Based on researched results regarding reporting of emission rights in the financial statements of examined entities, companies do not have a uniform approach to the reporting of emission rights. That makes it almost impossible to compare impacts of emission rights on financial situation of the reporting entities between each other.