FINANCIAL RECOGNITION AND REPORTING OF ENVIRONMENTAL COSTS

AKINDEJOYE, John Adetunji (2016) FINANCIAL RECOGNITION AND REPORTING OF ENVIRONMENTAL COSTS. Nigerian Journal of Banking, Finance and Entrepreneurship Management., 2. pp. 1-8.

Text Environt. Accountin article, 20th March, 2016..docx - Published Version Download (34kB)

Abstract

Production of goods and services lead to two categories of costs, namely; conventional costs and environmental costs. The former are the costs of turning raw materials and human labour into finished goods and services, while the latter means costs of degradation and pollution of the environment as a result of production. While conventional costs are well recognized and reported in financial statements, environmental costs are largely ignored despite UN advice that they should be incorporated into national income accounting. This study reviewed the concepts of environmental costs, related theories and some previous studies, and examined the environmental financial reports that are available from very few firms. The study found out that almost all companies ignored any reports on environmental costs while few have scanty reports mostly in foot notes. It was recommended that laws should be made by nations to make environmental costs recognition and reports mandatory for all organizations.

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