An entity that classified its carbon offsets as intangible assets, measured using the cost model, needs to determine the cost of the assets upon their usage or disposal. IAS 38 has no guidance on determining the cost of an individual unit of intangible asset on its usage or disposal where the entity holds a large number of similar items.

Management should use its judgement in developing and applying an accounting policy in the absence of an IFRS that specifically applies to a transaction, other event or condition [IAS 8 paras 10-12]. As such, management of an entity can refer to the principles of IAS 2 in determining the cost of an individual carbon offset upon its usage or disposal where there are a large number of similar items. Techniques for arriving at cost, instead of using actual costs, can be used where there are a large number of similar items. The entity should consider the type of carbon offsets when assessing whether they are similar items. For further discussion regarding cost measurement under IAS 2, please refer to paragraphs 25.30 - 25.33 of the PwC Manual of Accounting.