Selecting organizational boundaries.

CFR · 2024-01-01 · US · Title 10

(a) Each reporting entity must disclose in its entity statement the approach used to establish its organizational boundaries, which should be consistent with the following guidelines: (1) In general, entities should use financial control as the primary basis for determining their organizational boundaries, with financial control meaning the ability to direct the financial and operating policies of all elements of the entity with a view to gaining economic or other benefits from its activities over a period of many years. This approach should ensure that all sources, including those controlled by subsidiaries, that are wholly or largely owned by the entity are covered by its reports. Sources that are under long-term lease of the entity may, depending on the provisions of such leases, also be considered to be under the entity's financial control. Sources that are temporarily leased or operated by an entity generally would not be considered to be under its financial control. (2) Entities may establish organizational boundaries using approaches other than financial control, such as equity share or operational control, but must disclose how the use of these other approaches results in organizational boundaries that differ from those resulting from using the financial control approach. (3) Emissions from facilities or vehicles that are partially-owned or leased may be included at the entity's discretion, provided that the entity has taken reasonable steps to assure that doing so do

official document · source cfr-2024 · id 10:§ 300.4