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ENVIRONMENTAL
COSTING
Accounting for Strategic Decisions
ENVIRONMENTAL COSTING - ENVIRONMENTAL GOODS ANS SERVICES
• Costs caused - are connected with
economic units which are causing
the environmental aggravation by its
own actions and activities
• Costs born - made by economic
units no matter if they had any
impact on the environment
taking into
account
environnemental
costs
company knows
which costs are
related to which
product
environmental costs not considered
inappropriate investment decision
big pool of overheads costs arbitrarily allocated
inappropriate and costly decisions
when using
inefficient practices
too much money
spent on energy
companies not using
environmental
costing
unaware of impact
on P/L accounts and
balance sheet
POOR ENVIRONMENTAL
BEHAVIOR
boycott in
relation the
products or
services of
the enterprise
Decreasing
sales
Reducing
prices of the
land
The
deterioration
of the brand
positioning
Bad
customers
perception
A significant reason
for implementing
environmental cost
accounting is
regarding the precise
identification and
allocation of
environmental costs.
Environmental costs
can often be hidden
from management, as
they are frequently
incorporated into the
general overhead
cost accounts
Implementation of environmental cost
accounting
In order to manage: the energy
consumption, water waste, air pollution
emission and others
This helps companies make a right
strategic decision
Benefit in a future
DISADVANTAGES AND
LIMITATIONS
• impact on the production
cost
• price of a product or
service will increase
• regulations regarding
production and utilization
of chemicals
• design and implementation
of internal environmental
audits may further be very
costly
PERFORMANCE IMPROVEMENTS
Management
system
improvements
Financial
benefits
Organization
reputation
AVOIDING OBSTACLES OF
ENVIRONMENTAL COSTING USAGE
Future study on valuation
techniques
Integration with financial
accouting
Standard method of
Environmental accouting
MANAGEMENT ACCOUNTING
 Tool for enterprise management  more complete and detailed
information
 Helps manager to make right decision
 Considerable investment but will give benefits in long term
perspective
 Helps to know how a particular cost is related to a product
  better decisions
Conclusion

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Prezentacja Accounting

  • 2. ENVIRONMENTAL COSTING - ENVIRONMENTAL GOODS ANS SERVICES • Costs caused - are connected with economic units which are causing the environmental aggravation by its own actions and activities • Costs born - made by economic units no matter if they had any impact on the environment
  • 3. taking into account environnemental costs company knows which costs are related to which product environmental costs not considered inappropriate investment decision big pool of overheads costs arbitrarily allocated inappropriate and costly decisions
  • 4. when using inefficient practices too much money spent on energy companies not using environmental costing unaware of impact on P/L accounts and balance sheet
  • 5. POOR ENVIRONMENTAL BEHAVIOR boycott in relation the products or services of the enterprise Decreasing sales Reducing prices of the land The deterioration of the brand positioning Bad customers perception A significant reason for implementing environmental cost accounting is regarding the precise identification and allocation of environmental costs. Environmental costs can often be hidden from management, as they are frequently incorporated into the general overhead cost accounts
  • 6. Implementation of environmental cost accounting In order to manage: the energy consumption, water waste, air pollution emission and others This helps companies make a right strategic decision Benefit in a future
  • 7. DISADVANTAGES AND LIMITATIONS • impact on the production cost • price of a product or service will increase • regulations regarding production and utilization of chemicals • design and implementation of internal environmental audits may further be very costly
  • 9. AVOIDING OBSTACLES OF ENVIRONMENTAL COSTING USAGE Future study on valuation techniques Integration with financial accouting Standard method of Environmental accouting
  • 10. MANAGEMENT ACCOUNTING  Tool for enterprise management  more complete and detailed information  Helps manager to make right decision  Considerable investment but will give benefits in long term perspective  Helps to know how a particular cost is related to a product   better decisions Conclusion