Scribd
Upload
142 views3 pages

3a - EX - Answers - Organizational Boundaries

Company Z participates in five facilities with varying levels of ownership and control. Under the equity share approach, Z would account for 4115 tonnes of emissions, under the operational control approach Z would account for 8000 tonnes, and under the financial control approach Z would account for 6000 tonnes. The different approaches can lead to varying amounts of emissions being reported depending on the level of ownership and operational or financial control a company has over a facility.

Uploaded by

zillsmk
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
142 views3 pages

3a - EX - Answers - Organizational Boundaries

Company Z participates in five facilities with varying levels of ownership and control. Under the equity share approach, Z would account for 4115 tonnes of emissions, under the operational control approach Z would account for 8000 tonnes, and under the financial control approach Z would account for 6000 tonnes. The different approaches can lead to varying amounts of emissions being reported depending on the level of ownership and operational or financial control a company has over a facility.

Uploaded by

zillsmk
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 3

ANSWER KEY

1. Company Z participates in five facilities, of which only one is fully owned and
the rest are joint operations. Its business relationship with each of the facilities
is as follows:
Financial Operational
Facility Control Control Ownership
(Yes/No) (Yes/No)
A No No 25%

B No Yes 51%

C Yes No 100%

D Yes Yes 30%

E No Yes 49%

In the table below, apply the consolidation rules on the total emissions of each
of these five facilities separately to calculate the emissions Z would account for:
Total Emissions
Facility Financial Operational
Facilities Equity Share
Level Control Control
Approach
Emissions Approach Approach
A 500 0 0 125
B 1000 0 1000 510
C 1000 1000 0 1000
D 5000 5000 5000 1500
E 2000 0 2000 980
Company Z
6000 8000 4115
TOTAL

2. What do you notice from the table above about the three different
approaches Can you think of any situations when a company might use one
approach over the other?
ANSWER KEY

3. Alpha, Inc. is a company with a complicated organizational structure. The


legal, ownership, operational, and financial characteristics of each of its
operations are outlined in the table below. In the last three columns, specify
which percentage of each operation’s emissions Alpha, Inc. should include in its
GHG inventory under the equity share, operational control and financial control
approaches to setting organizational boundaries.

Wholly Percent of GHG emissions accounted for


Treatment
owned and Economic and reported by Alpha, Inc. under each
Control of in Alpha,
joint Legal structure interest consolidation approach
operating Inc.’s
operations and partners held by
policies financial Financial Operational Equity
of Alpha, Alpha, Inc.
accounts Control Control Share
Inc.

Wholly
Incorporated
Beta 100% Alpha owned 100% 100% 100%
company
subsidiary

Incorporated
Gamma 40% Alpha Subsidiary 100% 100% 40%
company

Joint venture; Joint


partners have financial
50% by
Delta joint financial Epsilon control via 50% 0% 50%
Beta
control; the other Beta and
partner is Epsilon Epsilon

Subsidiary of 75% by via


Pi Gamma 100% 100% 30%
Gamma Gamma Gamma

Incorporated joint
Omega venture, other 56% Lambda Subsidiary 100% 0% 56%
partner Lambda
ANSWER KEY

You might also like