Accounting Rules Research Articles

The Importance of the Reliability of Accounting Information in Determining Taxable Income

Purpose: The aim of this research to achieve the possibility of achieving a positive interaction between accounting and tax and attention to the development of accounting standards and their adaptation to local tax legislation, and the importance of the reliability of accounting information contained in the financial statements with the International Accounting Standard (12) for the purpose of reaching tax profit based on accounting profit is increasingly important. Theoretical framework: There is a lack of reliability in the financial statements that represent the outputs of accounting, in other words that the accounting information does not spare the aspect of honest representation of business results and financial position and it does not clearly reflect the nature of the taxpayer's activity, as well as the above there is a difference between accounting profit and tax profit. Design/Methodology/Approach: The first section is the research methodology, the second section is the theoretical aspect, accounting information, the third section is the practical side, and the fourth section is the conclusions of recommendations in addition to the sources of research. The research community was in the General Authority for Taxation Companies Section and the research sample was for four local private shareholding companies, which are as follows: 1. Modern sewing company, 2. Iraqi Company for Carpets and Furnishings. 3. Al Mansour Company for Pharmaceutical Industries, Medical Supplies, Cosmetics and Sterile Water. 4. Baghdad Soft Drinks Company. The research sample consisted of a group of Iraqi private companies listed on the Iraqi Stock Exchange and the industrial sector selected private companies from among the rest of the sectors for the following reasons: 1. Of the companies listed on the Iraqi Stock Exchange within the industrial sector, the number of listed companies according to the reports of the Iraqi Stock Exchange (21) companies. 2. Of the traded companies, where the volume of traded shares according to the reports of the Iraqi Stock Exchange for the year 2020 (3140.8) million shares and a value of (10526.8) million dinars as it reached in 2021 (2913.5) million shares and the value of (9022.9) million dinars. Findings: The research focused on measuring the reliability of accounting information through measures of the quality of accounting profits of the companies of the research sample by adopting the reliability property to measure the degree of reliability of the financial statements of companies before and after the adoption of the application of the International Accounting Standard (IAS 12) in accordance with the local accounting rules adopted in the presentation of financial statements. The use of statistical methods in measuring the reliability of accounting information within the financial statements of private shareholding companies dealing in the Iraqi Stock Exchange, in accordance with the requirements of the application of the International Accounting Standard (IAS 12) income taxes. Study the requirements for the application of the International Accounting Standard (IAS 12) on income tax and its impact on the determination of taxable income. Research, practical & social implications: The accounting outputs, which are represented by the financial statements (final accounts and balance sheet) are the basis on which to rely when determining taxable income to complete the tax accounting process, and it is normal that the state of dependence on those accounting outputs (financial statements) depends on the degree of reliability of those outputs for the tax administration, and it is worth mentioning thestate of dependence on those accounting outputs (financial statements). Originality: the value of the study was to indicate the extent to which the reliability of accounting information affects the determination of taxable income through the measure of reliability of accounting information as follows: Reliability, Test the search measurement tool, Test the normal distribution of the reliability scale of the companies research sample, Testing research hypotheses, Analysis of regression results for the reliability of accounting information of the companies research sample, Checklist analysis.

IMPACT OF LULUCF ACCOUNTING RULES FOR CLIMATE CHANGE MITIGATION GOALS: WINNING OR LOSING?

Land use, land-use change, and forestry (LULUCF) sector plays an important role in climate change mitigation as long-term goal of carbon neutral economy depends on sector’s ability to sequestrate carbon in biomass and soil. With reference to the Paris Agreement, accounting rules for LULUCF sector have been heavily discussed in European Union (EU), seeking of trustworthy inclusion of the sector in the assessment of Union’s greenhouse gas (GHG) emission reduction target. Therefore, the paper aims to analyze LULUCF sector’s contribution to climate change mitigation with different accounting rules applied in EU countries and particularly in Lithuania. On EU level LULUCF sector’s absorption in 2019 has equaled around –234 million t CO2 eq. (6% of total EU GHG emissions), in some countries reaching more than a half of national emissions. However, different accounting rules applied may provide significantly different number of potential credits for separate EU countries, creating some “winners” and “losers” situation. Though inclusion of LULUCF sector into GHG’s emissions reduction targets remains discussible, some stability in rules is one of the main preconditions for proper LULUCF sector management decisions.

CFO gender and financial statement comparability

This study examines the effect of chief financial officers (CFOs) gender on firms' financial statement comparability. Using a sample of Chinese listed firms, we find that firms with female CFOs exhibit higher comparability relative to firms with male CFOs. We further find that the positive relation between having a female CFO and comparability disappears in the industries that are dominated with male CFOs. In additional analyses, we fail to find any significant effects of having female chief executive officers (CEOs) or other female executives on comparability, highlighting the importance of CFOs in the domain of financial reporting decisions. Finally, we show that only in non-male CFO dominated industries, greater comparability is associated with an improvement in analysts' forecast accuracy and dispersion. Overall, our findings are consistent with the view that, due to their innate personality and behavioral differences, female CFOs are likely to exhibit stronger incentives to comply with accounting rules and standards, which in turn improves comparability. We also highlight the uniqueness of comparability by showing that it does not always co-move with reporting quality since it is an inter-firm attribute rather than a firm's own reporting characteristic.

Cryptoassets – Perspectives of Accountancy Recognition in the Technological Era

The growth of the cryptoassets phenomena, along with the lack of applicable accounting rules, offers difficult issues for financial reporting specialists in Romania. Therefore, handling the accounting of cryptoassets requires a detailed understanding of both cryptoassets technology and operation, as well as key accounting concepts. In the absence of steps made to control this sort of transactions through accounting standards, holders of cryptoassets are unable to apply the proper accounting treatment for the activity in which they are involved. The regulatory international framework for cryptoassets needs to be consistent and standards should be developed to safeguard holders. The European Economic and Social Committee believes it is important to treat non-financial products based on blockchain technology as physical assets, and not as financial instruments, following the principle of "same activity, same risk, same rules". Others, argue that digital currencies should be recorded as: cash equivalents or cash, inventories, financial or intangible assets. As a result, the purpose of this article is to overview the accounting treatment perspectives given by the IFRS in comparison with the Order of the minister of public finance no.1802/2014 regarding the possible treatments of cryptoassets. Furthermore, the authors believe this article can contribute to accounting research by providing a direction to accounting regulators. Based on the review of specialised literature, existing standards and legislation, the paper indicates that the relevant accounting approaches to cryptoassets are as intangible assets, stock or fixed assets held for sale. However, they could also be seen as means of payment, like foreign currency, even if they do not meet the characteristics of cash. The perspectives on the taxation of cryptoassets are provided by analysing the types of taxes and the VAT regime applicable to cryptoassets, according to the Romanian Fiscal Code, the existing ANAF rules and the VAT Directive at European level. At the same time, the authors analysed and presented certain statistical data, such as the market capitalisation of cryptoassets, the degree of acceptance and the usage degree of cryptocurrencies worldwide, which show that there is a tendency to increase their use.

MNEs' Incentives Under a Global Minimum Tax Based on Accounting Standards

The Organisation for Economic Co-operation and Development has proposed a pillar two global minimum tax (GMT) for which the tax base is the jurisdiction-specific effective tax rate (ETR), an accounting metric calculated under the rules of accrual accounting. History has shown that when tax is imposed on accounting numbers, taxpayers often use the discretion available in accounting to manage their tax liability. This paper argues that the discretion that multinational enterprises (MNEs) can exercise within accounting rules to change their ETRs will be limited because increasing ETR (to reduce GMT) also reduces accounting income, which in turn could impose higher financial reporting costs on firms. Financial reporting costs are the costs to firms of reporting lower accounting income, and could include higher borrowing costs or more restrictive covenants imposed by lenders. Firms generally prefer to report sustainable net incomes with a steady growth rate to impress their capital market stakeholders. Lower sustainable accounting income can also adversely impact a firm's stock price through the price-earnings ratio. While planning opportunities available to MNEs to avoid the GMT are not limited to shifting accounting profits across jurisdictions, the alternative of shifting factors of production is likely to be more complex and more expensive to implement, and is likely to remove some of the first-order income tax savings from locating intangible factors of production in low-tax jurisdictions. Avoiding GMT at the affiliate level by inflating ETRs could therefore conflict with firms' overarching objectives of maximizing reported earnings and stock prices. These objectives are also currently aligned with established executive compensation structures that motivate management to increase firms' stock prices.

Unveiling the liaison between financial development dimensions, energy efficiency and ecological footprint in the context of institutional frameworks: evidence from the Emerging-7 economies.

Financial development and energy efficiency can facilitate the transition towards a more environmentally sustainable and responsible economy. Simultaneously, the importance of institutional effectiveness cannot undermine the need to manage financial and energy consumption activities. To this end, the primary objective of this study is to examine the effects of financial development and energy efficiency on the ecological footprint of the Emerging-7 economies from 2000 to 2019. The study specifically focuses on the influence of these factors within the context of robust institutional mechanisms. We employ the STIRPAT (Stochastic Impacts by Regression on Population, Affluence, and Technology) model as the analytical framework to accomplish this. This study takes into consideration three aspects of financial development, which are: (i) the depth of financial development, (ii) the stability of financial development, and (iii) the efficiency of financial development. In addition, this study has developed an institutional index using principal component analysis. The index comprises several crucial indicators: Control of Corruption, Government Effectiveness, Political Stability, Regulatory Quality, Rule of Law, and Voice and Accountability. The study raises the importance of energy efficiency in terms of energy intensity on ecological footprint. The study's findings suggest that without robust institutional mechanisms, the potential of financial development depth, stability, and efficiency to improve ecological well-being may not be fully realized. However, the study concludes that these institutional mechanisms positively impact mitigating the ecological footprint.

QUALITY OF R&D INFORMATION IN THE DISCLOSURES OF PHARMACEUTICAL COMPANIES IN HUNGARY

The Hungarian Accounting Act and the International Financial Reporting Standards require different accounting treatments and disclosures for research and development activities. While examining ten years’ financial statements of five Hungarian pharmaceutical companies, we revealed the differences between the two accounting systems and evaluated the quality of the provided accounting information. Incorporating former researchers’ findings, the authors developed a criteria system for content analysis to examine the impact of accounting differences on the quality of accounting information. The financial statements presented on the IFRS basis provided more consistent high-quality information, while the disclosures prepared on the domestic accounting rules showed a variable picture.

The Influence of the Quality of Institutions on Tourism in the EU Countries

The present study aims to investigate the effect of the quality of institutions on tourism development in a panel of 27 countries from the European Union for the period of 2008-2021. The number of arrivals and employees in tourism measures tourism development. The control variables used, which also represent the determinants of tourism, are GDP growth rate per capita, inflation, higher education, quality of the environment, and trade. Quality of institutions indexes are constructed based on indicators of government effectiveness, political stability, regulatory quality, the rule of law, and voice and accountability. To estimate the impact of selected determinants in tourism development, we used the Generalized method of the moments-GMM model. According to the obtained results, it can be concluded that there is a positive connection between the quality of institutions and tourism. The results of this research should provide insight into the most important determinants of management and institutions and explain their influence on events in tourism. All of the above knowledge should be of interest to the management bodies in charge of creating national development strategies. The contribution of this research is reflected in the clarification of the importance of institutions' quality and monitoring. Previous research on this topic is generally limited to specific tourist regions or is based on smaller indicators. This paper covers the area of the European Union, with different stages of development and share in tourist traffic.

Assessing the Role Ghana's Public Health Act, 2012 (Act 851) Can Play in Oversight of Artificial Intelligence Healthcare Systems to Prevent Medical Errors and Improve Patient Safety

Purpose: Evaluate the possibilities and limitations of implementing the Essential Ghana Public Health Act to manage the growing development of artificial intelligence (AI)-enabled health care in light of the contemporary gap in research so. Methodology: A review of the 2012 public health regulatory provisions and anti-technology surveillance mechanisms document detailing the needs and risks of AI regulation. Results: Current regulations have a customizable foundation for documenting policies, reporting algorithmic errors, creating updated workplace safety audits, and enforcing non-compliance but required by fully implemented investigations that strong material differences are addressed and that AI-specific rules are codified into new legal rules. Conclusions: Ghana currently has the mechanisms in place for an interim administration to flexibly implement long-term healthcare legislation on gaps awaiting reconciliation through investment in specific sectors, staffing and reforms. Recommendations: Immediate training to prepare inspection personnel before the onset of the crisis is guidelines and rules for algorithmic accounting. What really matters is the effective implementation of existing legislation and the informing of strategies for modernization and certainly also the innovation of policy frameworks for the innovation of new health care systems. Scientific contribution: addresses the knowledge gap in maintaining vulnerabilities for emerging technologies that are tracked by regulations in disruption.

Деякі питання адміністративно-юрисдикційної діяльності територіальних центрів комплектування та соціальної підтримки в Україні

The article analyzes the administrative and jurisdictional powers of territorial recruitment and social support centers regarding military accounting under martial law. The terminology and peculiarities of its use in the consideration of administrative offenses, the responsibility for which is provided for by Articles 210, 210-1, 211 of the Code of Ukraine on Administrative Offenses, are considered. In particular, it was noted that citizens’ compliance with the rules of military accounting involves a number of restrictions of a coercive nature and in most cases contains informational content, as well as the obligation to comply with the order of a military body or official authorized to do so. For a more thorough analysis of the administrative-jurisdictional activity of territorial recruitment and social training centers, attention is paid to the administrative-legal consolidation by the legislator of the terms that characterize the legal status of a person during military service in the Armed Forces of Ukraine and other military formations. The terms «draft», «call», «assembly point», which have a legal meaning in the qualification of administrative offenses for violating the rules of military accounting, are also analyzed. The urgency of considering the administrative jurisdiction of the territorial centers of recruitment and social support regarding compliance with the order and rules of military record keeping in Ukraine was emphasized. It is noted that the content of Articles 210, 210-1, 211 of the Code of Ukraine on Administrative Offenses does not provide for the implementation and specifics of violations of the rules of military accounting. It was concluded that the administrative-jurisdictional activity of the territorial recruitment and social support centers regarding the violation of military accounting rules is carried out in accordance with the current legislation of Ukraine and other normative legal acts regulating military service in the Armed Forces of Ukraine and other military formations. At the same time, the following remain controversial provisions on: 1) description of the unlawful behavior of the subjects set forth in Articles 210, 210-1, 211 of the Code of Ukraine on Administrative Offenses; 2) interpretation of the terms characterizing military service and having legal significance for the qualification of this type of offense.

Governance, regulatory quality and financial institutions: emerging economies perspective

PurposeThe study evaluates the effects of governance and other regulatory structures on the development of financial institutions in the subregion of sub-Saharan Africa (SSA).Design/methodology/approachData for the analyses were compiled from relevant sources from 1996 to 2019 from a sample of 36 countries in the subregion. Empirical analyses were carried out using the Prais-Winsten panel corrected standard errors panel estimation technique augmented by pooled ordinary least squares with Driscoll and Kraay (1998) standard errors model.FindingsFindings from the study suggest that governance and institutional quality index, as well as individual governance and regulatory variables, have positive effect on the development of financial institutions among economies in SSA. Further empirical estimates show that output growth volatility has negative moderating impact on the relationship between effective governance, control of corruption, rule of law, regulatory quality, voice and accountability, and development of financial institutions. Additionally, the results show that during periods of heightened macroeconomic risk, financial institutions could benefit from improved governance and effective regulatory structures.Originality/valueCompared to related studies that have reviewed the discourse on financial institutions, this study rather focuses on how governance structures and institutions influence development of financial institutions instead of the impact of financial institution on the broader economy. The authors further augment this interaction by examining how the relationship in question may be moderated by macroeconomic shocks.

Wood Pellet Production in the U.S. South and Exportation for ‘Renewable’ Energy in Europe

In recent years, European demand for wood pellets has surged due to a misconception of carbon neutrality. The current legal frameworks posit that simply replacing a harvested tree renders the burning of wood pellets for energy use renewable energy. This oversimplification does not consider a number of factors, including the difference in carbon sequestration capabilities between original, natural forests and replacement monoculture plantations, the cumulative impact of CO2 emissions in the atmosphere, and the years required for a replacement tree to sequester as much carbon as the harvested tree. The EU and U.K. can currently utilize emissions “reductions” due to burning wood pellets to reach domestic renewable energy goals along with commitments under the Paris Agreement. The corresponding increase in demand for wood pellets in Europe has resulted in a hotspot of wood pellet production in the U.S. South with several significant consequences. This Note presents the environmental justice and climate change impacts of the growing wood pellet industry in historically marginalized communities in the U.S. South, with a close look at the Enviva wood pellet plant in Hamlet, North Carolina. It provides an overview of the inadequacies of U.S., EU, U.K., and international environmental law in protecting both the global climate and local communities from the impacts of wood pellet production and combustion. This Note then builds on calls to change IPCC and EU carbon accounting rules for wood harvested for energy use to propose a solution to the environmental justice side of the wood pellet dilemma in international environmental law: namely, adding environmental justice safeguards to the UNFCCC Paris Agreement.

The Influence of Internal Control, Compliance with Accounting Rules and Compatibility of Compensation on the Trend of Accounting Fraud

The purpose of this study is to gather empirical data on the relationship between internal control, appropriate compensation, and adherence to accounting standards and how those factors affect the tendency of accounting fraud in state-owned companies (BUMN) in the construction industry. The sample of state-owned businesses used in this study (BUMN). Two businesses were selected as samples in this study. Convenience sampling is the foundation of this study. There was a total of 80 respondents in the sample for this study. Several regression analyses approach and a statistical methodology run using the SPSS program are used to test the hypothesis in this study. The findings of this study suggest that internal control, appropriate pay, and adherence to accounting regulations all have an impact on a person's propensity to engage in accounting fraud.

The Impact of Changes in Pension Accounting under IAS 19R on Shareholder Wealth

ABSTRACT This study examines stock price reactions to International Accounting Standards Board announcements associated with International Accounting Standard (IAS) 19R during the standard-setting process. IAS 19R removes the corridor approach in accounting for actuarial gains and losses on defined benefit plans. This rule change likely weakens the financial position of most firms that previously used the corridor approach upon adoption and subsequently increases balance sheet volatility. Using a sample of listed firms in Norway, we find that the market generally reacts negatively to IAS 19R events, but stock price responses are insignificantly different for affected and unaffected firms, suggesting that shareholders view the standard as value neutral. However, market reactions are more negative for firms with higher bankruptcy risk. Additional analyses indicate that market reactions vary with discretion in actuarial assumptions and funded status. Overall, our results document how investors respond to the amendments to pension accounting rules under IAS 19R.

THE MODEL OF PARLIAMENT IN WAR TIMES: THE FORMAT OF COLLABORATION

The article considers the possibility of transforming legislative structures into an interactive platform for joint actions with the participation of key stakeholders during martial law, using the example of the Verkhovna Rada of Ukraine 2022. The collaborative format is presented as an alternative approach to instrumental partnership, which allows the involvement of subjects from various levels and institutions. The author proposes the structure of the military parliament based on three indicators, namely: the general systemic context, the specifics of the management regime, and the dynamics of cooperation. The first indicator is based on the criteria for key participants, as well as the agreement on the rules of participation and accountability on the platform of joint actions. At the same time, the scope of collaborative subjects' powers may vary depending on the competencies of the involved stakeholders. The second indicator plays the role of procedural legitimacy marker, affecting the degree of policy coherence and decision-making, while the third factor means the willingness of participants to support joint political decisions regardless of the level of their agreement with the players' personal political preferences. In the text of the article, the researcher divides the general structure of integrated governance into separate management blocks, based on the peculiarities of the Ukrainian parliament and the functionality approved by the VRU Regulations. In parallel with some unit reduction, it is proposed to implement two additional units: rapid response and civil control as appropriate during martial law. In addition to the structure, the author prescribes some changes in parliamentary procedures and behavioral patterns among deputies. Despite the potential advantages, the researcher notes that the collaborative format of cooperation has several disadvantages, namely: the impact of joint results on the procedural legitimacy of decisions, as well as the principle of determining the personal contribution of each of the involved stakeholders, remains uncertain. It would be worthwhile to take into account the existing network connections between the political actors of the Ukrainian parliament to calculate the potential risks of the transition to an interactive space of action.

Acceptable nudge strategies to incentivize the use of wearables and physiolytics at work: A Q-methodology examination

The Covid-19 pandemic has increased the pressure on organizations to ensure health and safety in the workplace. An increasing number of organizations are considering wearables and physiolytics devices as part of their safe return to work programs so as to comply with governments’ accountability rules. As with other technologies with ambivalent use (i.e., simultaneously beneficial and harmful), the introduction of these devices in work settings is met with skepticism. In this context, nudging strategies as a way of using design, information, and other ways to manipulate behaviors (system 1 nudge) and choices (system 2 nudge) has gained traction and is often applied alongside the introduction of ambivalent technologies with the aim to “nudge” their use. While the feasibility of different nudge strategies is often studied from only a managerial perspective, where employees’ volitional autonomy and dignity is often treated as secondary, we explore which nudges are acceptable from the perspectives of ordinary workers. Using Q-methodology as a more evolutionary and participatory way to design nudges, we describe five basic strategies that are (to varying degrees) acceptable to them: (a) positive reinforcement and fun, (b) controlling the organizational environment, (c) self-responsibility, (d) collective responsibility, and (e) adapting the individual environment. Our findings show that there is a wide range of viewpoints on what is being considered an acceptable nudge and stress the importance of a transparent, equal dialogue between those who design nudges and potential nudgees.

Ending at the Wrong Time: The Financial Reporting Consequences of a Uniform Fiscal Year-End

ABSTRACTThere is an ongoing debate over uniformity versus flexibility in accounting regulation. This study examines the financial reporting consequences of a rigid accounting rule in China under which the fiscal year-end is uniform for all companies. Using extensive interviews together with large-sample archival analyses, we find that “mismatched” firms—those whose mandated financial reporting cycles are not aligned with their business cycles—exhibit higher levels of absolute abnormal accruals than their nonmismatched counterparts. Further analyses suggest that the negative association between mismatching and financial reporting quality is mainly driven by unintentional estimation errors rather than intentional earnings manipulation.Data Availability: Data are available from the public sources cited in the text.JEL Classifications: M41; M48; K22.

Faktor-Faktor Yang Berpengaruh Terhadap Kecenderungan Kecurangan Akuntansi Pada BUMN di Kota Ambon

The purpose of this study was to analyze the factors of internal control effectiveness, appropriateness of compensation, observance of accounting rules, information asymmetry and management morality that influence the tendency of accounting fraud. The research data is primary data collected by directly distributing questionnaires to BUMN in Ambon City. The samples in this study were employees or employees in the accounting, finance and treasurer departments. The results of empirical testing using multiple regression analysis show that the effectiveness of internal controls, appropriateness of compensation, observance of accounting rules, management morality have no influence on the tendency of accounting fraud. Meanwhile, information asymmetry has a positive influence on the tendency of accounting fraud. The conclusions that can be obtained are 1) This study proves that there is an influence between information asymmetry on the tendency of accounting fraud, these results are consistent with previous research. In addition, this research is also in line with previous research which states that the suitability of compensation has no effect on the tendency of accounting fraud. 2) However, this study found things that contradict the hypotheses and theories and results of previous studies, that the effectiveness of internal controls, observance of accounting rules and management morality are not able to reduce the tendency of accounting fraud. This is due to a lack of awareness of the importance of internal control and accounting rules within the company

The Effect of Revised Accounting Standards on Earnings Management: Evidence from China

This study discusses the changes in China's accounting standards around 2019 and the possible impact of China's newly revised accounting standards on the earnings management of Chinese boss companies. This paper discusses the evolution of accounting standards in China, including the adoption of IFRS and subsequent revisions to the standards. This paper analyzes the impact of changes in the accounting treatment of financial instruments and debt restructuring on earnings management. In general, changes to Chinese accounting standards have curbed some of the manipulation of earnings by listed Chinese companies. But the revised accounting rules make fair-value measurement in China more extensive. As the development of China's capital market is not yet sound, many financial assets do not have public consistent or credible channels to obtain fair value, whether the newly revised accounting standards can improve the quality of accounting information in China remains to be investigated.

Electricity accounting in life cycle assessment: the challenge of double counting

PurposeIn grid electricity consumption models, the location-based method uses regional average emission factors to account for environmental impacts. The market-based method is based on contractual agreements, verifying the exclusive claim on electricity from specific energy sources. An inconsistent application of these methods in life cycle assessment (LCA) and GHG accounting can lead to double counting. Especially, double counting electricity associated with rather low environmental impacts, such as renewable energy, might lead to impact underestimations. The aim of this paper is to identify, describe and propose solutions to double counting challenges.MethodsA four-step procedure is carried out. First, the specifications on grid electricity mix selection in frequently applied standards for LCA and GHG accounting are analysed. Besides the ISO norms for LCA (14040/44) and carbon footprinting (14064/67), the GHG Protocol and the Product and Organizational Environmental Footprint (PEF/OEF) are considered. Based on this analysis, challenges of double counting electricity from specific sources are identified. In the third step, potential solutions for avoiding double counting are proposed. The last research step consists of an illustrative case study to demonstrate the calculation of market-based electricity mixes and identify potential adjustments necessities for LCA application.Results and discussionA parallel application of the location-based and the market-based method poses the main double-counting challenge. Thus, avoiding double counting demands consistent method application throughout the whole life cycle. Whereas this is relatively straightforward for the location-based method, consistent market-based method application is more challenging. LCAs rely on average life cycle inventory processes, which mostly include location-based electricity mixes. However, for consistent market-based method application throughout the life cycle, electricity-related environmental impacts in the inventory system also need to be market-based. This would demand a partial recalculation of LCI datasets using market-based residual electricity mixes. Besides illustrating the calculation of market-based electricity mixes, the case study is used to identify and propose solutions for two main challenges for residual mix application in LCA: countries without residual mix and electricity under a double marketing ban.ConclusionDouble counting of electricity from specific energy sources is a challenge, since it can lead to under- or overestimations of environmental impacts. Both the location-based and market-based method can avoid double counting. However, parallel or inconsistent applications of both methods lead to double counting. In order to avoid double counting, there is a need to enable and use consistent electricity accounting rules in LCA and GHG accounting.