HomeAbout UsCapabilites
Services
Audit & Assurance
Financial Statement audit & attestationFinancial Reporting advisory
Advisory
Link 1Link 2Link 3
Tax
Link 1Link 2Link 3
Business Services & Outsourcing
Link 1Link 2Link 3

Service

Audit & Assurance

Tax & Regualtory

Advisory

Bussiness & Outsourcing

Audit & Assurance

Financial Atatement Audit & Attestation

Financial Reporting Advisory

Tax & Regualtory

Corporate Tax

Indirect Tax

Finacial Sector

Family Office,estate & succession Planing

Advisory

Mergers & acquisitions

Valuation

Due diligence

Corporate finance & investment banking

Start-up advisory

hgghhgdgfhhgd

IPO advisory

IT risk advisory & assurance

Sustainability & ESG

BFSI advisory

Management consulting

Business & Outsourcing

Finance & Accounting Outsourcing

Global Outsourcing

Compliance

Fund Accouting & Trust Accounting

Virtual CFO

Payroll

Services

Audit & Assurance
Tax & Regulatory
Advisory
Business & Outsourcing

Audit & Assurance

Financial Statement Audit & Attestation

Financial Reporting Advisory

Featured

What is the COSO framework?

September 24, 2024

Going Concern: What It Means for Your Business

August 8, 2024

Fraudulent Financial Reporting

June 19, 2024

Tax & Regulatory

Corporate Tax

Indirect Tax

Financial Sector  

Family, Office, Estate & Succession Planning

Featured

What is the COSO framework?

September 24, 2024

Going Concern: What It Means for Your Business

August 8, 2024

Fraudulent Financial Reporting

June 19, 2024

Advisory

Mergers & Acquisitions

Valuation

Due Diligence

Corporate Finance & Investment Banking

Start-up Advisory

Promoter Restructuring & Succession Planning

IPO Advisory

IT Risk Advisory & Assurance

Sustainability & ESG

BFSI Advisory

Management Consulting

Featured

What is the COSO framework?

September 24, 2024

Going Concern: What It Means for Your Business

August 8, 2024

Fraudulent Financial Reporting

June 19, 2024

Business & Outsourcing

Finance & Accounting Outsourcing

Global Outsourcing

Compliance

Fund Accounting & Trust Accounting

Virtual CFO

Payroll

Featured

What is the COSO framework?

September 24, 2024

Going Concern: What It Means for Your Business

August 8, 2024

Fraudulent Financial Reporting

June 19, 2024

Services

Services

Audit & Assurance
Tax & Regulatory
Advisory
Business & Outsourcing

Audit & Assurance

Financial Statement Audit & Attestation

Financial Reporting Advisory

Featured

What is the COSO framework?

September 24, 2024

Going Concern: What It Means for Your Business

August 8, 2024

Fraudulent Financial Reporting

June 19, 2024

Tax & Regulatory

Corporate Tax

Indirect Tax

Financial Sector  

Family, Office, Estate & Succession Planning

Featured

Invoice Management System (IMS) under GST

September 18, 2024

GST IMPORTANT ANNOUNCEMENTS via CIRCULAR NO. 230 to 233 dated. 11th Sept. 2024

September 18, 2024

GST IMPORTANT ANNOUNCEMENTS IN 54TH GST COUNCIL MEETING (September 9, 2024)

September 13, 2024

Advisory

Mergers & Acquisitions

Valuation

Due Diligence

Corporate Finance & Investment Banking

Start-up Advisory

Promoter Restructuring & Succession Planning

IPO Advisory

IT Risk Advisory & Assurance

Sustainability & ESG

BFSI Advisory

Management Consulting

Featured

TAXATION OF INFLUENCERS AND CONTENT CREATORS: THE NEW FRONTIER

June 24, 2025

Corporate Social Responsibility (CSR)

June 23, 2025

Compulsory Convertible Debentures (CCD) & Compulsory Convertible Preference Shares (CCPS)

July 29, 2024

Business & Outsourcing

Finance & Accounting Outsourcing

Global Outsourcing

Compliance

Fund Accounting & Trust Accounting

Virtual CFO

Payroll

Featured

LEAVE & LAW POLICIES FOR EMPLOYEES IN INDIA

May 9, 2024

SOCIAL SECURITY LAWS- PF & ESIC

April 20, 2024

SOX Compliances

January 6, 2023

Audit & Assurance
Financial Statement Audit & AttestationFinancial Reporting Advisory
Advisory
Mergers & AcquisitionsValuationDue DiligenceCorporate Finance & Investment BankingStart-up AdvisoryPromoter Restructuring & Succession Planning IPO Advisory IT Risk Advisory & AssuranceSustainability & ESGBFSI advisoryManagement Consulting
Tax & Regulatory
Corporate TaxIndirect taxFinancial sector  Family, office, estate & succession planning
Business & Outsourcing
Finance & Accounting OutsourcingGlobal outsourcingComplianceFund accounting & Trust AccountingVirtual CFOPayroll
Solutions
Multinational CorporatesIndian CorporatesStartups
BlogsBlogsCareersContact UsContact Us
Schedule a consultation

Introduction of Greenhouse Gases in Accounting

By
Team Bilimoria
December 4, 2023

Introduction

  • Greenhouse Gas (GHG) Protocol standardizes frameworks to measure and manage GHG emissions from private and public sector operations, value chains, and mitigation actions. Greenhouse gases are the gasesin the atmosphere that raise the surface temperature of planets. Greenhouse gases are infrared active gases that absorb and emit infrared radiation in the wavelength range emitted by The relevance of greenhouse gas (GHG) emissions in auditing and accounting is becoming increasingly important due to the growing awareness of climate change and its effects on businesses and the environment. Incorporating GHG emissions into auditing and accounting practices can help companies identify, manage, and reduce their environmental impact while also providing transparency to stakeholders.
  • Greenhouse gas (GHG) emissions from human activities intensify the greenhouse effect. This contributes to climate change. Carbon dioxide is one of the most important factors in causing climate change. It’s the main greenhouse gas resulting from human activities.
  • The GHG Protocol Corporate Standard divides a company’s emissions into direct and indirect emissions:
  • Direct emissions are emissions from sources that are owned or controlled by the reporting company.
  • Indirect emissions are emissions that are a consequence of the activities of the reporting company, but occur at sources owned or controlled by another company.

Emission Type

Definition

Examples

Direct Emission

·       Emissions from operations that are owned or controlled by the reporting company

·     Emissions from combustion in owned or controlled boilers, furnaces, vehicles, etc.; emissions from chemical production in owned or controlled process equipment.

Indirect emissions

·     Emissions from the generation of purchased or acquired electricity, steam, heating, or cooling consumed by the reporting company.

·     Use of purchased electricity, steam, heating, or cooling

Indirect emissions

·     All indirect emissions that occur in the value chain of the reporting company, including both upstream and downstream emissions.

·     Production of purchased products, transportation of purchased products, or use of sold products

GHG Protocol Principles.

GHG protocol has mentioned certain principles which helps in ease accounting of transactions. The principles are as follows: -

Overview of Quantification Methods and Data Types

There are two main methods to quantify emissions: direct measurement and calculation. Each requires different types of data. In practice, calculation will be used most often to quantify emissions, which requires the use of two types of data:

  1. Activity data:

Activity data are the level of an activity that affects greenhouse gas (GHG) emissions or sequestration.

  1. Emission factors:

Emission factors are the common bilateral that specify the quantity of greenhouse gases that is emitted per unit of GHG-producing activity.

Quantification Methods

Quantification Method

Description

Relevant Data Types

Direct Measurement

Quantification of GHG emissions using direct monitoring, mass balance or stoichiometry.

Formula:

GHG = Emissions Data x Global Warming Potential

Direct emissions data

Calculation

Quantification of GHG emissions by multiplying activity data by an emission factor.

Formula:

GHG = Activity Data x Emission Factor x GWP

Activity data

Emission factors

Apart from the above-mentioned quantification methods, there are certain other methods which helps in Physical Allocation and Economic Allocation.

  • Physical Allocation:

Allocating the emissions of an activity based on underlying physical relationship between the multiple inputs/outputs and the quantity of emissions generated.

Allocation Factors

Examples of Allocation factors and Formulas

Mass

Allocated Facility Emissions =

(Mass of Products Purchased/ Total Mass of Products Produced) * Total Emissions

Volume

Allocated Facility Emissions=

(Volume of Products Purchased/ Total Volume of Products Produced) * Total Emissions

Energy

Allocated Facility Emissions =

(Energy Content of Products Purchased/ Total Energy Content of Products Produced) * Total Emissions

Chemical

Allocated Facility Emissions =

(Chemical Content of Products Purchased/ Total Chemical Content of Products Produced) * Total Emissions

Number of Units

Allocated Facility Emissions =

(Number of Units Purchased/ Total Number of Units Produced) * Total Emissions

  • Economic Allocation:

Allocation Factors

Examples of allocation factors and formulas

Market Value

Allocated Facility Emissions =

(Market Value of Products Purchased/ Total Market Value of Products Produced) * Total Emissions

Allocating the emissions of an activity based on the market value of each output/product.

Conclusion:

According to the reports of Greenhouse Gas Protocol (GHGP), India has initiated taking measures to limit the emissions and accordingly the Government of India is also planning to make India as first ever domestic carbon market under Energy Conversation Act through the India’s Carbon Credit Trading Scheme, 2023.

Also, the GHGP has laid down certain measures under GHG emissions Reduction Audit Guidance which will be discussed in the upcoming learning session.

Authors:

Sloak Chauhan

Associate Consultant   | Email-Id sloak.chauhan@masd.co.in |

LinkedIn Profile

Punit Ruparelia

Director | Email-Id punit.ruparelia@masd.co.in |

LinkedIn Profile

Explore More

June 24, 2025

Team Bilimoria

TAXATION OF INFLUENCERS AND CONTENT CREATORS: THE NEW FRONTIER

In recent years, the rise of social media has given birth to a new and powerful profession: AN INFLUENCER What began as individuals sharing their personal lives, opinions, and talents online has now evolved into a full-fledged marketing industry. Influencers are people with a dedicated following on social media platforms like Instagram and YouTube who partner with brands to promote products and services in a relatable & authentic way. This form of marketing, known as influencer marketing, has gained immense attraction due to its ability to reach niche audiences and drive engagement.

Read More

June 23, 2025

Team Bilimoria

Corporate Social Responsibility (CSR)

Corporate Social Responsibility (CSR) is outlined in Section 135 of Companies Act, 2013 and has been made mandatory for the companies following the specified criteria from April 1, 2014. CSR Activities were introduced with an intention to allow companies to contribute to the social, environmental, and economic development of the country.

Read More

Read All Blogs

BILiMORIA MEHTA & CO. is a leading Chartered Accountancy firm with a rich legacy of serving clients in India and internationally.

info@bilimoriamehta.com

+91 (22) 6697-2111

Company

  • About Us
  • Contact Us
  • Careers
  • Resources

Solutions

  • for Startups
  • for Indian Corporates
  • for Multinational Clientele

Solutions

  • Multinational Corporates
  • Indian Corporates
  • Startups

Services

  • Audit & Assurance
  • Tax & Regulatory
  • Advisory
  • Business & Outsourcing

Resources

  • Blogs
  • Regulatory Updates
© 2024 BILiMORIA MEHTA & Co. All Rights Reserved
Privacy PolicyTerms & Conditions