green accounting

Slide 1: 

Green Accounting Submitted by:- Kunzang diskit Roll no. 14 M.Sc (F) kuk

Contents : 

Contents Introduction History of green accounting Goal of green accounting Scale and scope forms of environmental accounting System of national account Rational for environmental accounting the environmental cost and types of costs The advantage Green accounting project for India Environmental analysis Needs of green accounting Limitation of green accounting Conclusion References

Green accounting : 

Green accounting Is important tools for understanding the role played by the natural environment in the economic It provide data which high light the both the contribution of natural resources to economic wellbeing and the cost imposed by pollution and resources degradation It describe an effort to incorporate environmental benefit and costs into economic decision making

History of green accounting : 

History of green accounting The term green accounting has been enounced since the 1980s and known as a management tools. The conventional SNA was first started in the USA in 1942. The present situation of green accounting and its most evolved from, sustainable accounting, has been receiving continues attention in the academic accounting literature in the early 1990s the concept started almost three decades ago in the early 1970s with important contributions.

Goal of green accounting : 

Goal of green accounting Is to increases the amount of relevant for those who need or can use it. Relevant data depend on the scale and scope of coverage

Scale and scope : 

Scale and scope Applicable at different scale of use and scope of coverage Application at an individual process level, a system, a product, a facility or an entire company level. Coverage may include specific costs, avoidable costs, future costs and social external costs. Decision on a scale and scope of application significantly impact ability to excess and measure cost.

1.Environment Management Accounting : 

1.Environment Management Accounting EMA is the identification, collection ,estimation, analysis, internal reporting, and use of materials and energy flow information, environmental cost information, and other cost information for both conventional and environmental decision-making within an organization. For companies that have the goals of saving money, especially environmental costs, and reducing environmental impacts, EMA provides essential information for meeting those goals

Environmental Management Accounting (EMA): : 

Environmental Management Accounting (EMA): Segment Environmental Accounting: to select an investment activity and project. Eco balance Environmental Accounting: to support PDCA for sustainable environmental management activities. Corporate Environmental Accounting ; to inform the public of relevant information compiled in accordance with the environmental accounting.

2. Environmental financial accounting(EFA) : 

2. Environmental financial accounting(EFA) Financial accounting with a particular focus on reporting environmental liability costs and other significant environment costs.

3. Environmental national accounting (ENA) : 

3. Environmental national accounting (ENA) National level accounting with a particular focus on national resources stocks and externality costs etc.

System of national account (SNA) : 

System of national account (SNA) SNA is the set of account which government compile routinely to track the activity of their economic. SNA data are used to calculate major economic indicators GDP,GNP, saving rate and trade balance figure. the system of NA view the relationship between the environmental and the economy free economic perspective only.

Standard National Accounts (SNA) framework : 

Standard National Accounts (SNA) framework NDP = C + I – D + X – M Where: NDP = Net Domestic Product C = final Consumption I = Investment (fixed capital) D = Depreciation X = Exports M = Imports Misleadingly used as measure of welfare: welfare not proportionate to consumption of produced goods

Rational for environmental accounting : 

Rational for environmental accounting GDP and NDP have been key indicator in the economic policy making Use as a measure of economic progress of a country and standard of living. These traditional measure of economic activity are now recognize as a inadequate as they can’t accurately measure the contribution of environment and the impact of the economic activities on environment

Environmental cost : 

Environmental cost Major challenge in application of environmental accounting a management tool is identifying relevant cost Cost definition determine by intended use of data.

Types of environment costs : 

Types of environment costs Conventional Potentially hidden Regulatory Upfront and backend Voluntary 3 Contingent 4 Image

The advantage : 

The advantage Pollution preventing Designing environment & green accounting improvement Projection, cost, estimating life cycle in the environment Product circulation administration from environmental prospective Supply process from environmental perspective The product or produces liability Environmental-centered managements system Assessing , testing and reporting performance of environmental activities.

Slide 18: 

This project aims to re-calibrate the existing annual State Domestic Product (“SDP”) accounts to incorporate changes in each state’s stock of natural capital (minerals, arable land, forests & freshwater) and investment in human capital (education, health, and pollution control). This information will be a useful frame of reference for future dialogues on public policy and it is expected to sharpen the focus on preserving environmental capital and growing human capital. Green Accounting Project for India - GAISP Green Accounting for Indian States and Union Territories

Environmental analysis : 

Environmental analysis

Need of green accounting : 

Need of green accounting Practically for developing countries like India it’s a twin problem about saving environmental and economic developing. As the country economy is not very strong, hence it should be improve first. A study by world bank estimated the about 34,000 crores were lost by India due to environmental damage Company like AT&T are practically implementing green accounting

Limitation of green accounting : 

Limitation of green accounting There is no standard accounting method comparison between two firms or countries is not possible if method of accounting is different. It mainly considers cost internal to the company and excludes cost to society. Input for EA is not easily available because costs and benefits relevant to the environment are not easily measurable. It mainly consider the cost internal to the company and excludes cost to society. The cost for its tools and application initially is high.

Total economic valuation : 

Total economic valuation A new term TEV has been added to the lexicon of recourses economic. Non use value: are independent of people’s result use of the resource , under it fall intrinsic worth and heritage values. These are categorically classified as Existence value : represent the value which receives no direct benefits. Option value : refers to the willingness of the people . Bequest value: refers to an individual’s willingness to pay for preservation of a resources for future generation. TEV= UV + NUV = DUV+IUV+OV+NUV

Conclusion : 

Conclusion Green accounting takes into consideration environmental resources and changes in them, and integrates the result with the system of national account so as provide a valuable information base for planning and formulating policy for the integrated sustainable development and growth of the nation. Green accounting is in preliminary stages in India and whatever shows in the accounts in this regard is more or less compliance of relevant rules and regulation in the act. Actually, unless common people of India are not made aware towards environment safety, development of this regard is a little bit of doubtful.

Slide 24: 

Thank you