3%) of the responses in the comment letters in the study (MYCODE) were assigned a score of +1 to+ 2, meaning they agreed or strongly agreed with FVTPL measurement for all equities instruments.
In other words, the FASB proposed the one-measurement of fair value, with the two categories of FVTPL and FVTOCI (with extremely limited amortized cost or no cost with impairment) whereas the IASB proposed four categories: FVTPL, amortized cost, cost with impairment, and FVTOCI.
Hence any net settled contracts to buy, or indeed sell, carbon credits are in scope of IAS 39 and measured at FVTPL.
Where the credits are purchased in the secondary market, they are initially recognised at the purchase price (or at fair value on settlement if purchased under a forward contract measured at FVTPL as described above).
The examples show that hedge accounting can be beneficial when a forward contract to buy (or sell) carbon credits is caught in the scope of IAS 39 and measured at FVTPL (i.
As a consequence, its forward contracts over carbon credits are recognised as derivatives at FVTPL as they do not qualify for the IAS 39 own use scope exemption.