Vol. XVI, No. 2
Global News & Analysis from Aspen Publishers
Guidance on Environmental
The International Federation of Accountants (IFAC) has
issued an exposure draft of “International Guidelines on
Environmental Management Accounting (EMA).” The IFAC
commissioned the guidance document to consolidate the best existing
information on EMA, and to provide new information, as necessary.
The guidance document was prepared by Deborah E. Savage,
Ph.D. of the Environmental Management Accounting Research
& Information Center (Massachusetts, USA) and Christine Jasch,
Ph.D. of the Austrian Institute for Environmental Management
& Economics (Vienna, Austria). The IFAC will accept comments
on the document until 28 February 2005.
The guidance notes that the following factors are driving increas-
ing interest in EMA:
Increasing pressure from stakeholders interested in environmen-
Increasing importance of environment-related costs, and
Increasing recognition of problematic accounting practices.
The following sections provide information on the guidance.
EMA Focuses on Internal Decisionmaking
An organization typically tracks costs and revenues using two
broad categories of accounting: 1) financial accounting (FA), and
2) management accounting (MA). FA refers to accounting activities
and reports directed to external stakeholders (e.g., tax authorities,
creditors, investors). As such, FA is regulated by national laws and
international standards that specify how financial items should be
MA, on the other hand, focuses on providing information to man-
agement to support internal decisionmaking efforts. MA strives to
create, protect, preserve, and increase value, and then deliver that
value to the stakeholders of an organization. In contrast to FA, MA
practices are not regulated by law—organizations can implement
Perspectives . . . . . . . . . . . . . . . .5
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