ACC3200 Chapter Notes - Chapter 2: Whole-Life Cost, Environmental Resource Management, Management Accounting
14 Jun 2018
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Management Accounting Chapter 2 Notes
Environmental Management Accounting
Environmental management accounting (EMA): environmentally related management
accounting systems and practices
• These systems and practices can include life cycle costing, environ- mental cost
accounting, environmental performance measures, assessment of environmental
benefits and strategic planning for environmental management
• These data are identified, collected, estimated, analysed and reported for use by
internal decision makers within an organization
• Does not usually include external costs to society or the environment for which an
organisation is not legally accountable.
• The impact of an organisation’s performance on the environment, including the
natural systems such as land, air and water as well as on people and living organisms.
• This definition may include external costs, in contrast to the EMA approach to
assessing environmental performance.
• The interest in EMA is growing globally.
o In the early 1990s, the US Environmental Protection Agency set up a formal
program to promote the adoption of EMA
o In 2004 the International Federation of Accountants (IFAC) issued an
exposure draft International Guidelines on Environmental Management
Accounting (EMA)
EMA techniques
• EMA consists of a range of environmental management accounting techniques, some
of which produce financial information and some that produce physical information.
In this chapter we will consider primarily techniques that produce financial
information.
