GHG Accounting Financial Control Approach
Definition
The Financial Control Approach is a consolidation approach whereby a company accounts for 100 percent of the GHG Emissions over which it has financial control. It does not account for GHG emissions from operations in which it owns an interest but does not have Financial Control.
The company has financial control over the operation if the former has the ability to direct the financial and operating policies of the latter with a view to gaining economic benefits from its activities.[1]
For example, financial control usually exists if the company has the right to the majority of benefits of the operation, however these rights are conveyed. Similarly, a company is considered to financially control an operation if it retains the majority risks and rewards of ownership of the operation’s assets.
References
- ↑ The Greenhouse Gas Protocol, A corporate accounting and reporting standard, Revised Edition 2008
