Volume Accounting
Certified forest material tracking allows a manufacturer to hold a net positive quantity of certified wood fibre within an inventory management system regardless of the specific physical batch arriving at a production line. The fsc credit balance accounting method enables a company to mix certified and non-certified inputs while maintaining a record of the precise certified proportion available for output claims. This mechanism functions through a ledger that tracks the volume of inputs multiplied by their respective certification percentage.
Every output carries a claim that does not exceed the accumulated balance of credits currently held in the account. The system stops applying when the physical volume of material exceeds the verified input of certified fibre.
Output Management
Producers allocate credits to specific product batches once the manufacturing process concludes and the output volume reaches final measurement. A conversion factor determines the amount of credit consumed based on the ratio of input fibre to final product mass. Operations must clear these credits from the balance to ensure that total sales of certified material stay within the limits of the certified input.
The accounting period for these balances typically aligns with the production schedule of the facility to prevent discrepancies. Discrepancies between theoretical yields and actual physical production force an adjustment to the credit ledger to maintain accuracy.
System Boundary
The validity of any credit claim depends entirely on the separation of certified and uncertified material throughout the upstream supply chain before arrival at the factory. Each facility ensures that non-certified material meets minimum social and environmental criteria even when it does not hold a full chain of custody status. This requirement prevents the introduction of unacceptable sources into the material stream during the credit calculation process.
Periodic audits verify the integrity of the ledger entries against shipping documents and raw material invoices. Consistent reconciliation of these figures provides the assurance that the total certified product volume matches the quantity of certified inputs originally procured.
