Fossil fuel reserves and resources reporting and unburnable carbon:investigating conflicting accounts

Bebbington, Jan and Schneider, Thomas and Stevenson, Lorna and Fox, Alison (2020) Fossil fuel reserves and resources reporting and unburnable carbon:investigating conflicting accounts. Critical Perspectives on Accounting, 66. ISSN 1045-2354

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Abstract

This paper investigates fossil fuel reserves and resources disclosures and how they might change in response to global climate change agreements that seek to limit greenhouse gas emissions. On the one hand, it might be expected that fossil fuel firms will be less valuable if their reserves become ‘unburnable’. On the other hand, capital markets currently assign a positive value to fossil fuel reserves and resources. A conundrum, therefore, exists. Given that accounting disclosure rules underpin capital market valuation processes, this setting provides an opportunity to interrogate the functionality of accounting during a time of change. To achieve this goal, a multi-methods investigation has been undertaken; combining a survey of accounting disclosure rules for reserves, identification of accounting disclosures made by fuel firms in several country stock markets, and stock market participants’ views on the extent to which unburnable carbon exists. Using Miller and Power (2013) we identify when and how unburnable carbon could be recognized in corporate reporting.

Item Type:
Journal Article
Journal or Publication Title:
Critical Perspectives on Accounting
Uncontrolled Keywords:
/dk/atira/pure/subjectarea/asjc/1800/1802
Subjects:
ID Code:
152208
Deposited By:
Deposited On:
02 Mar 2021 16:55
Refereed?:
Yes
Published?:
Published
Last Modified:
22 Nov 2021 16:12