Chapter 7- Environmental Accounting Flashcards
What are the four functions of accounting(generally)
feedback to stakeholders about the performance
info to managers sothat they can make decisions about stuff
to have a record of customers, processes
its useful to see the past and to be able to calculate the future
3 steps of normal accounting
identify accounts
record transactions
determine accounts balances from period to period
goal and target group of management accounting
goal to satisfy internal needs, for corporate managers
goal and target for financial accounting
goal to satisfy external needs, for external corporate stakeholders
goal of any other accounting system
satisfy regulatory requirements
why would environmental managers need accounting information
they needs it about the waste and pollution to make decisions
what do stakeholders like shareholders demand of manager in financial accounting?
demand true and fair information
what is the goal of Environmental management accounting (3 goals)
optimize profits,
identify risks and
reduce costs
what is MEMA (monetary
environmental
management
accounting)
monetary information on environment-related costs, earnings and savings ( (e.g. fines for non-compliance with env. legislation))
what is PEMA (physical
environmental
management
accounting)
physical information on the use, flows and
rates of energy, water and materials (incl.
wastes)
What is a EMA?
Environmental management accounting
what is the difference of MEMA and PEMA?
MEMA is Monetary (Environmental related impacts on economic systems) PEMA is physical (Company-related impacts on environmental systems)
Is MEMA and PEMA used for internal or external accounting’
both internal (because they have management in their name which is for internal)
what is the accounting called that is for external uses? (super simple)
external environmental accounting
5 advantages of EMA (similar to any Environmental action)
shareholder demands fulfilled
competitive advantage
better relation with customers/NGO
anticipation of tighter legal disclosure requirements
better public relations and corporate legitimacy
what are some things environmental accounting keeps track of
Costs include costs to clean up or remediate contaminated sites,
environmental fines,
penalties and taxes,
purchase of pollution prevention technologies
and waste management costs
Whats an example of life cycle costing (so while looking at life cycle concept a company came up with something smart
Life cycle costing showed the considerably lower cost of the tote system, compared to the
previously existing system
Results: cost savings, reduced ‘de-pack’ times
what is activity-based costing
assignign the overhead costs to products (including env costs to product to then figure out that oil actually costs a lot bc of cleaning up or anything)
EMA in south african mining industry
they still do money accounting, so dont realize the env damage they do
example of a organisation that sets External environmental accounting (EEA)
SEC, IASB (international accounting standards board)
what are four ways to count the monetary external environment accounting
1) indirect costs(like a scrubber emissions still)
2) environmental assets internalize those, that bees work for you or the s^forest makes things cool)
3) environmental liabilities (internalize costs like the damage you made for other in the future like water pollution)
4) tradable emission allowanaces like the EU scheme
how and who can help with reporting the environmental aspects of the company for external accounting?
GRI Global Reporting Inititative (climate change, human rights and corruption) THey are like a help for env accounting and finding the physical things.
ad hic is non cost, big project, big decisions, major project measure total impact and routine would be the env cost per product
like xerox one reusable tote , routine is allocating the cost to one thing , ad hoc is just one off decision and the total amount i save
