At 1 July 20X0 the Government allocated emission trading allowances (ETAs) of 1,000 pitric tonries* (MT) to
Question:
At 1 July 20X0 the Government allocated emission trading allowances (ETAs) of 1,000 piêtric tonries*
(MT) to Ironbark Ltd at no cost. The ETAs expire after four years. This means they can be used to
settle obligations for CO emissions generated up to 30 June 20X4. Settlement of emission
obligations for each vear to 30 June occurs in August of that year.
ETAs can be traded in an active market. Market values were:
$24 per MT at 1 July 20X0.
$25 per MT at 30 June 20X1.
$27 per MT at 30 June 20X2
Ironbark Ltd's COy emissions were:
Nil for the year ended 30 June 20X1, as the factory was closed due to recurring lockdowns.
200 MT for the year ended 30 June 20X2.
Ironbark Ltd uses the IFRIC 3 model with revaluation to account for its participation in the emission
trading scheme. You should ignore tax effects.
Required:
b) State the carrying amount of each of the following items in Ironbark Ltd's financial statements on 30 June 20X2. If the item is not recognized, write NIL.
i) ETA Asset
li) Revaluation Surplus ETA
in) Emission liability
iv) Unearned income liability
Expert Answer:
