In 2004, the IASB attempted to address the accounting for credits and allowances in the International Financial Reporting Interpretations Committee (IFRIC) and issued IFRIC 3, Emissions Allowances (IFRIC 3). IFRIC 3 required that greenhouse gas emissions and credits be classified as intangible assets and accounted for at fair value regardless of whether the credit or allowance was purchased or issued. However, IFRIC 3 encountered considerable resistance from the accounting community, who argued that it resulted in a mismatch between assets and liabilities. The mismatch occurred because credits received would be recognized when obtained and liabilities would be recognized when incurred. The standard was subsequently withdrawn by the IASB in 2005. Currently, under IFRS, companies generally develop an accounting policy based on International Accounting Standard (IAS) 8, Accounting Policies, Changes in Accounting Estimates and Errors (E&Y, 2010). Furthermore, there remain a number of existing standards that provide authoritative guidance on relevant accounting that companies can use to inform their policies for GHG transactions, such as IAS 2, 20, 37, 38 and 39 (KPMG, 2008 ). US Cap and Trade Schemes: Acid Rain Program and NOx Budget Trading Program In the United States, the EPA is currently monitoring emissions of sulfur dioxide (SO2), nitrogen oxide (NOx), and carbon dioxide (CO2). The Clean Air Act helped establish a cap-and-trade system to allow electricity producers to trade SO2 and NOx. The two most successful cap-and-trade programs in the United States are the nationwide Acid Rain Program and the regional NOx Budget Trading Program in the Northeast. The Acid Rain Program is a departure from the traditional document center ......ounting.E&Y (2010). Carbon market preparation. (100159), Retrieved from http://www.ey.com/Publication/vwLUAssets/Carbon_market_readiness/$FILE/0912-1118264%20Carbon%20market%20Readiness.pdfSimnett, R, M Nugent and A Huggins (2009), “Developing an InternationalAssurance Standard on Greenhouse Gas Statements”, Accounting Horizons,23(4), 347-363. Simnett R., A. Vanstraelen, and W. F. Chua. 2009. Assurance on sustainability reports: an international comparison. The Accounting Review, forthcoming. Simnett R, W Green and A Huggins (2009), “GHG Emissions Standard on its Way”, Charter, October, 64-66. KPMG, (2008). Carbon accounting: the impact of carbon trading on the balance sheet. 3-15.Olson, E. G. (2010). Challenges and opportunities arising from greenhouse gas emissions reporting and independent audits. Managerial control journal, 25(9), 934-942.