Environmental Management Accounting - Assignment
Added on 2020-05-11
10 Pages1957 Words248 Views
Management AccountingTopic 2. Environmental Management AccountingIn 1998, the International Federation of Accountants (IFAC) (as cited by ACCA, 2017)originally defined environmental management accounting as:‘The management of environmental and economic performance, through the developmentand implementation of appropriate environment-related accounting systems and practices.While this may include reporting and auditing in some companies, environmentalmanagement accounting typically involves lifecycle costing, full cost accounting, benefitsassessment, and strategic planning for environmental management’.Critically discuss whether, in your opinion, “environmental management accounting” isimportant within a business environment in order to ensure the long term sustainability ofa business. 1| Page
Table of ContentsIntroduction......................................................................................................................................3Howenvironmental management accounting isuseful?.................................................................3Allocated Environmental Cost.........................................................................................................4Conclusion.......................................................................................................................................7References........................................................................................................................................82| Page
IntroductionThe environmental management accounting is significant in a business environment forensuringlong termsustainability in a business. The environmental management accountingsupports internal decision-making and provides the business with an opportunity of identifyingand reducing theecological costs(Buccina, Chene and Gramlich, 2013). The decrease inenvironment-linked capital investments or yearly environmental operating expenses can raise theprofit margins or allow lesser product pricing which can be used by business for retaining themarket share.Decreasein potential environmental liability can help in decreasing the legalliability expenses and enhance their access to funding and client contracts. Therefore it can besaid thatlong termsustainability of a business canbe attainedby use of environmentalmanagement accounting (Baboukardos, 2017).The environmental management accounting information is definitely very important for themanagement activities with particular college girl elements on management decisions withimportant effects. This kind of accounting offers the costdata whichis important for evaluatingthe management ass and the physical flow of information like usage of raw materials and thisgeneration level. Such details can be useful in characterising the environmental effects.Howenvironmental management accounting isuseful?In the last five decades, the idea of sustainable development has become quite important. In thelong run, only the businesses which protect the environment are ones who make profit andthroughout the acts of business, measures are taken for reduction of harmful impacts on theenvironment. The businesses are required to carry out their tasks on the basis of sustainability.But to carry out such activities environmental aspects also have to be considered. Nowadays,3| Page
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