Environmental Accounting in Capital Budgeting

Environmental Accounting in Capital Budgeting

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When making decisions regarding environmental investments, managers face increasing problems. On the one hand, these include legal requirements, introduction of voluntary tools (environmental systems of management, the National programme of cleaner production, etc.), which make environmental protection more demanding and expensive, and, on the other, information on costs to meet those demands is not available in time, and it is not accurate. Most companies find it difficult to quantify cost savings in their systems of environmental management. In any assessment of potential capital investments, environmental costs, cost savings and the benefits associated with those investments should be taken into account and compared with other investment opportunities. An integration of environmental accounting to capital budgeting quantifies and allocates environmental costs and benefits. To assess environmental costs include them to capital budgeting, Total Cost Assessment can be used.

When making decisions regarding environmental investments, managers face increasing problems. On the one hand, these include legal requirements, introduction of voluntary tools (environmental systems of management, the National programme of cleaner production, etc.), which make environmental protection more demanding and expensive, and, on the other, information on costs to meet those demands is not available in time, and it is not accurate. Most companies find it difficult to quantify cost savings in their systems of environmental management. In any assessment of potential capital investments, environmental costs, cost savings and the benefits associated with those investments should be taken into account and compared with other investment opportunities. An integration of environmental accounting to capital budgeting quantifies and allocates environmental costs and benefits. To assess environmental costs include them to capital budgeting, Total Cost Assessment can be used.

environmental accounting ,capital budgeting, Total Cost Assessment

environmental accounting ,capital budgeting, Total Cost Assessment

KOCMANOVÁ, A.; KOCMAN, K.

01.01.2003

St.John'sUniversity, USA

Budapest,Hungary

0-9657171-5-1

Global Business and Technology Association:Implementation of Changes in Values, Strategy and Policy

736

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