Accounting Theory: Deloitte's Valuation of the Great Barrier Reef

This report provides an in-depth analysis of the economic valuation of Australia's Great Barrier Reef, specifically focusing on the approach taken by Deloitte. The study examines the valuation process, including the survey methodology employed to gauge public perception and willingness to pay for the reef's health. It identifies key stakeholders, such as Deloitte, the Great Barrier Reef Foundation, and the public, and analyzes their motivations and interests. The report further connects the valuation to relevant accounting theories, particularly the Valuation of Intangible Assets, and discusses the challenges faced during the valuation process, such as extreme weather and water quality issues. Ultimately, the report concludes that the valuation is fair and highlights the positive impact of raising awareness about the Great Barrier Reef's economic value, advocating for its protection.

Running head: ACCOUNTING THEORY
Accounting Theory
Name of the Student
Name of the University
Author’s Note

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Abstract
The main aim of this essay is to analyze and evaluate the various aspects of the economic
valuation of the Great Barrier Reef of Australia. The study evaluates the approach taken by
Deloitte in order to value the Reef. It has been seen that there are many stakeholder associated
with the valuation of the Great Barrier Reef as they will be impacted by these move. Apart from
this, some economic and accounting theories have been connection with this valuation.

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Introduction
The Great Barrier Reef of Australia is considered as the largest living thing the Earth and
it can be visible from the outside of the space. The Great Barrier Reef is 2300 kilometer long and
it comprises of thousands of reefs and a large number of islands. From the recent information, it
can be seen that one of the three major accounting firms all over the world, Deloitte has made the
valuation of the Great Barrier Reef. As per the valuation of Deloitte, the total valuation of the
Great Barrier Reef is $56 billion. Some major aspects or issues are connected with the valuation
of the Great Barrier Reef. Some of the aspects are the valuation process of the Great Barrier
Reef; different issues related with the valuation of the Great Barrier Reef; role and interest of
different stakeholders and many others. All these aspects are discussed below.
Discussion
In case of the valuation of the Great Barrier Reef, Deloitte has used a specific technique.
In this particular case, Deloitte conducted a survey that consisted of Australian as well as
International residents in order to understand what their valuation approaches of techniques of
the Great Barrier Reef are. In this valuation process, IPSOS Public affairs helped Deloitte Access
Economics. Deloitte conducted the survey on 1000 Australians and 500 international residents.
The valuation process was designed in such a way that biasness and limitations in the valuation
process can be avoided effectively. International residents included people from many countries
like Canada, China, Germany, Mexico, India, South Africa, Spain, United Kingdom and United
States of America. All these specific foreign countries were selected as these counties have most
number of visitors of the Great Barrier Reef comparing to the other countries (Economics 2013).
Deloitte conducted the survey based on the online basis. As a result of this survey, Deloitte
determined the estimate value of the Great Barrier Reef and this value was beyond its pure

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economic contribution to the economy of Australia. Most of the focus was on three major areas.
First, the general perception and attitude towards the Great Barrier Reef as a global asset by the
Australians and the international people. Second, the Australian and global tourist’s activities
and their costs related to the Great Barrier Reef. Third, the enthusiasm of the Australian and
international people to pay for the future health of the Great Barrier Reef. After the analysis of
the survey results, they were combined with certain economic methods in order to get the
economic, social and icon value of the Great Barrier Reef (Authority 2014).
At the time of the valuation of the Great Barrier Reef, it can be seen that Deloitte had to
face certain difficulties. Two of the major issues are the issue of extreme weather and the issue of
water quality. It has been seen that due to the effects of global warming, the weather of the world
have been changing adversely and this process has its effects on the valuation of the Great
Barrier Reef (deloitte.com 2017). Apart from this, with the negative effects of bad water,
Deloitte faced great difficulties to determine the actual value of the Reef. The matching of
language and tone was another major issue at the time of conducting the survey. As a result, it
affected the valuation process of the Reef. Deloitte had to face issue at the time of determining
the traditional owner economic value of the Great Barrier Reef. Deloitte also faced issues at the
time of deterring the international value of the Reef. Most importantly, Deloitte did not take any
help of any theoretical approaches in order to solve the issues (Authority 2012).
Based of the valuation of the Great Barrier Reef by Deloitte, it can be said that this is a
fair valuation. There are some reasons behind this. First, Deloitte has taken an unique approach
that is survey of Australians and international people to understand their perception about the
valuation of the Great Barrier Reef. This process has been helpful for the determination of the
actual valuation method of the Great Barrier Reef. On the other hand, Deloitte considered all

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necessary aspects at the time of the valuation of the Great Barrier Reef; these aspects are non-use
valuation, direct use valuation, indirect use valuation and economic, social and icon value
(Authority 2014).
It needs to be mentioned that the valuation of the Great Barrier Reef was needed in order
to make the people aware about the importance of Great Barrier Reef. It has been seen that many
Australians started to consider the fact that the Great Barrier Reef has no value. With the
valuation of the Reef, the Australian as well as people all over the world will be able to know the
actual economic value of the Great Barrier Reef. It is expected that people will take initiatives to
protect the Great Barrier Reef after knowing the actual worth of it (Brander et al. 2012).
There are many stakeholders involved with the valuation of the Great Barrier Reef. Two
of the major stakeholders are Deloitte and the Great Barrier Reef Foundation. The main
motivation of these two parties is to make people aware about the worthiness of the Great Barrier
Reef as they have started thinking that the Reef of priceless. With the valuation, they will be able
to make the people aware about the economic value of the Reef. The people of Australia and all
over the world are another group of stakeholders of the Reef. These people include common
people, tourists and many others. The valuation of the Reef will make them able to develop
corrective measures for the protection of the Great Barrier Reef (Rolfe and Windle 2012).
Most of the stakeholders will be beneficial from the valuation of the Great Barrier Reef
as they will be able to know the economic valuation of the Reef. Apart from this, they will be
able contribute to the cause to protect the Great Barrier Reef. In this regard, Agency Theory
related to the stakeholders can be mentioned. As per the principles of this theory, the
stakeholders will be able to use their power towards the protection of the Great Barrier Reef and

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this aspect works as a major motivation for the stakeholders. Thus, the principles of this theory
have a deep connection with this aspect (barrierreef.org 2017).
For the valuation of the Great Barrier Reef, the Accounting Valuation theories play an
integral part. In this regard, it needs to be mentioned that the Accounting theory regarding the
Valuation of Intangible Assets is appropriate for the valuation of the Reef. With the principles
and standards of Valuation of Intangible Assets, the reason of the valuation of the Reef can be
explained. From the valuation of the Reef, people all over the world will get intangible benefits
like people can go for tourism in the Great Barrier Reef, the world environment will be
benefitted with the valuation and others. It needs to be mentioned that all these are intangible
benefits. In case there is not any valuation of the Reef, people from Australia as well as all over
the world will not be able to enjoy the intangible benefits of the Reef. Thus, it can be said that
the principles and standards of Valuation of Intangible Assets theory is appropriate in this regard
(Axtle-Ortiz 2013).
From the above discussion, it can be said that the people of Australia as well as all over
the world will be beneficial from the valuation of the Reef. In the valuation of the Reef, there are
some accounting theories that re helpful; they are Valuation of Intangible Assets, Valuation of
Natural Resources Asset Pricing Valuation. With the help of these accounting models and
theories, it is possible to measure the impact of the valuation of the Great Barrier Reef. Thus,
based on the above discussion, it can be said that the overall impact of the valuation of the Reef
will be positive (Uno, K. and Bartelmus 2013).

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Conclusion
From the above discussion, it can be said that the valuation of the Great Barrier Reef is a
major move from Deloitte and the Great Barrier Reef Foundation towards the protection of the
natural phenomena. It can be seen that Deloitte used some effective measured in order to get the
economic valuation of the Great Barrier Reef. Some of the major stakeholders of this process to
value the Great Barrier Reef are Deloitte, the Great Barrier Reef Foundation, people of Australia
and all over the world.

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References
Authority, G.B.R.M.P., 2012. Informing the outlook for Great Barrier Reef coastal ecosystems.
Authority, G.B.R.M.P., 2014. Great barrier reef outlook report 2014.
Authority, G.B.R.M.P., 2014. Great Barrier Reef Region Strategic Assessment: Strategic
Assessment Report.
Axtle-Ortiz, M.A., 2013. Perceiving the value of intangible assets in context. Journal of Business
Research, 66(3), pp.417-424.
barrierreef.org. (2017). Total economic value of the Great Barrier Reef. [online] Available at:
https://barrierreef.org/uploads/Total%20economic%20value%20of%20the%20Great%20Barrier
%20Reef%20-%20Need%20to%20know.pdf [Accessed 24 Aug. 2017].
Brander, L.M., Rehdanz, K., Tol, R.S. and Van Beukering, P.J., 2012. The economic impact of
ocean acidification on coral reefs. Climate Change Economics, 3(01), p.1250002.
deloitte.com. (2017). The economic, social and icon value of the Great Barrier Reef. [online]
Available at: https://www2.deloitte.com/content/dam/Deloitte/au/Documents/Economics/
deloitte-au-economics-great-barrier-reef-230617.pdf [Accessed 24 Aug. 2017].
Economics, D.A., 2013. Economic contribution of the Great Barrier Reef.
Rolfe, J. and Windle, J., 2012. Distance decay functions for iconic assets: assessing national
values to protect the health of the Great Barrier Reef in Australia. Environmental and Resource
Economics, 53(3), pp.347-365.

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Uno, K. and Bartelmus, P. eds., 2013. Environmental accounting in theory and practice (Vol.
11). Springer Science & Business Media.