Volume 15, Issue 3, 2005
Technical Resources
Air Pollution Consultant
1.9
© 2005 Aspen Publishers, Inc.
New Guidance Available on Environmental
Management Accounting
recent guidance document
issued by the International
Federation of Accountants
(IFAC) provides new information on
how environmental
liabilities and
compliance costs can be better inte-
grated
into
business
accounting
systems. The exposure draft, titled
“International Guidelines on Environ-
mental
Management
Accounting
(EMA),” was commissioned by the
IFAC to consolidate the best existing
information on EMA, and to provide
new information, as necessary. The
guidance notes that the following
factors are driving increasing interest
in EMA:
• Increasing pressure from stake-
holders interested in environmental
issues,
• Increasing importance of environ-
ment-related costs, and
• Increasing recognition of problem-
atic accounting practices.
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 Manage-
ment & Economics (Vienna, Austria).
EMA Focuses on Internal
Decision-Making Activities
An organization typically tracks
costs and revenues using two broad
categories of accounting: 1) financial
accounting,
and
2) management
accounting. Financial accounting refers
to accounting activities and reports
directed to external stakeholders (e.g.,
tax authorities, creditors, investors). As
such, financial accounting is regulated
by national laws and international
standards that specify how financial
items should be treated.
Management accounting, on the
other hand, focuses on providing
information to management to support
internal
decision-making
efforts.
Management accounting strives to
create, protect, preserve, and increase
value, and then deliver that value to the
stakeholders of an organization. In
contrast
to
fi