IFRS IC agenda decision on the recognition of intangible assets from climate-related expenditure
At its April 2025 meeting, the IASB also endorsed the decision of the IFRS Interpretations Committee, finalised the previous month, regarding the recognition of intangible assets from climate-related expenditure (IAS 38). This decision follows on from the decision on the provisioning of climate-related commitments, which did not really specify the counterparty entry when a liability was recognised.
The Committee immediately set aside the case of carbon credit expenditure, which is already covered by a research project that will be included in the IASB work plan consultation for the period 2027-2031.
The request therefore related exclusively to the research and development expenditure incurred to meet climate commitments. However, the Committee noted that these expenses had no characteristics that required any specific accounting treatment. In this case, research and development expenditure is capitalised if it meets the criteria set out in IAS 38; otherwise, it is recognised as an expense. As it had found no material diversity in practice, the Committee concluded that no standard-setting was necessary.
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