The paper 'Organizational Control of Sertony Ltd Pty' is a great example of a finance and accounting case study. Emissions from facilities and vehicles leased by Sertony Ltd Pty are categorized as Scope. This classification depends on the source of emissions, and the approach Sertony Ltd Pty takes to establish its organizational boundary. To date, Stony has approximately $15 billion AUD of assets under its management. The company’ s organizational boundary emissions classified as Scope 1 or 2 are; gas, electricity, and diesel, while those outside the company’ s organizational boundary are classified under Scope 3 to include traveling expenses.
If Stony Ltd Pty is using the financial control approach or equity share method to determine its organizational boundary, then owned and leased assets fall within its organizational boundary are considered in financial accounting as wholly-owned assets and are inputted categorically on the balance sheet. If the company is employing the operational control approach to determine its organizational boundary, all the leased assets would be considered within a company’ s organizational boundary only with the existence of an operating lease. Considerations of operating leases are defined for their absence on finance or capital leases terms. There is usually a possibility of double-counting emissions owing to mistaken placement in either scope 1, 2, and 3.
The Greenhouse Gases Protocol Corporate Standard was designed to rid off double counting of emissions over a range of companies within scope 1 and 2. For instance, the scope 1 emissions of Sertony Ltd Pty, which could be a generator of electricity, can be mistakenly counted as the scope 2 emissions of company X which is an end-user of electricity. Stony Ltd Pty’ s scope 1 emissions will not be counted as scope 1 emissions by firm Y, which is a partner organization of Sertony Ltd Pty.
This happens as long as Sertony Ltd Pty and firm Y regularly employ a similar equity share approach or control when combining emissions. Again, scope 2 definition does not permit double counting of emissions in scope 2, meaning that two separate companies do not mutually count scope 2 emissions from the procurement of similar electricity. Averting double-counting in scope 2 emissions creates usefulness in accounting levels for Green House Gas trading programs engaged in electricity end-users regulation.
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