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What are Environmental Costs Accounting?

Environment Costs Accounting is a process of cost accounting which traces direct costs, and it also allocates indirect costs through collecting and presenting the information about the possible environmental, social and economic costs. Environmental costs are actually difficult to define from a business standpoint.

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Why it is so important?

Environmental costs accounting is essential as it helps corporate level management to know whether the corporate is discharging their responsibilities properly or not for sustainable development and also by meeting with the business objectives of the organization.

Why isGreen accounting?

Green accounting can be better treated as the latest system of sustainable accounting. This type of accounting permits the calculation of income for a nation considering the depletion of the natural resource base and economic damage of the country.

It is also a measure of sustainable income level which can be secured without minimizing the stock of the natural assets.

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What are the objectives of green accounting?

There are number of objectives like:

  • Valuation of environmental costs and welfares
  • Explanation and dimension of indicators of environmentally adjusted income and product
  • Association of physical resource accounts with financial environmental
  • Accounting for the preservation of tangible wealth

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