Question:
Write an essay on Corporate Accounting.
The sustainability practice is rapidly increasing among the contemporary organization and in order to improve the sustainability quotient of a company the company is engaging in the process of development more effective sustainable strategies so that the company can improve its sustainability. The companies try to develop sustainable business practice so that the companies can reduce the emission of green house gasses such as carbon die oxide, carbon mono oxide, and methane etc (Anil Kumar, Kumar and Mariyappa, 2010). These green house gases have severe environmental impact as these increases the pollution level and the substantial cause of global warming. The companies also play some social responsibilities in order associated with the societies, where the companies performing their business activities. Apart from this, in order to perform the business activities the companies have to maintain the legal aspect of the country so that the companies can be able to minimize the legal issue in order to perform the business activities and can provide optimum focus on their core business activities so that the companies can be able to accomplish sustainable growth and development (De Cort et al., 2009). Presently the companies tend to report sustainability in the annual report of the company as well as several companies use to publish separate environmental or sustainability report for the users who want to know about the financial performance as well as environmental performance of the company. The bodies like International Accounting Standard Board (IASB) and AASB have different reporting style for the environmental accounting. There are reporting styles like IAS/IFRS which report the environmental accountability. This report will analyze various reporting standard along with environmental disclosure.
Environmental reporting
The environmental reporting shows the debate in the society and the business for the case of the limits that are provided for the purpose of the business accountability. It generally reflects on the models of the stockholders or the stakeholder’s continuum and also signifies the seven positions of the corporate responsibility. Thus it also helps in the development of the issues for the proper creation of the common traditional belief and thus also needs for the creation of the accounting standards and thus it also helps in enlisting the rules for the creation of the proper responsibility towards the environment of the organization (Kumar and Mariyappa, 2010). Thus the accounting standards are also required for the creation of the environmental impacts that are required for the proper enhancement of the issues that helps in the proper enhancement of the corporate responsibility. Environmental reporting also includes the developmental strategies that help in the creation of the development of the organization and thus it also takes account of the responsibility that is created for the proper enhancement of the issues. Thud it also hlps in the proper evaluation accounting issues related to the impacts created in the society for the proper creation of the development of the issues and thus it also helps in the proper enhancement of the environmental conditions that are identified by the process of the IASB/AASB acts for the proper provision of the annual report enhancement of the environment reporting issues (Miller, 2010). There are different other issues that are helps in facilitating the reports created on the environmental impacts and also helps in the provision of the consequences of the impact of the activities that are carried out in the organization for the propr maintenance of the issues and thus the report is created to provide the full satisfaction to the company’s overview and thus it also helps in the proper expansion of the business.
Environmental issues related to GPFR
There are various environmental issues that are connected to the involvement of the growth hampering of the organization. The financial reporting standards are initiated for the proper enhancement of the issues that are requisite for the growth of the environmental issue that is identified for the growth and the development of the standards (Mukherjee and Mohammed Hanif., 2006). Thus it also helps in the proper enhancement of the environmental disclosures that helps in the identification of the environmental issues. Thus it also helps in the proper provision of the issues that are related to the financial materials of the environment issues which is eventually requisite for the shareholders, investors and the other stakeholders. For the betterment of the business, the environmental impacts need to be solved for the creation of a successful and the sustainable environment. Thus for the proper creation of the environmental impact, the environmental directives are appointed in the organization for the proper identification of the issues that are related to the growth and the enhancement of the organization. Thus the accounting structures are crated for the proper generation and the calculation of the environmental issues. The GPFR i.e. the general purpose financial reports which provides the proper examples of the financial reporting standards for the proper evaluation of the issues. Thus, the variation of the tangible and the intangible assets includes the measurements that help in the proper generation of the issues (Pahuja, 2009). The issues of the environmental reporting also consist of the environmental contamination, allowances and the transactions that are related to the EU transmission and the cost of the waste disposals. Thus it also helps in the proper determination of the issues that are related to the development of the factors that are required for the proper creation of the enhancements in the environment. It also helps in the proper identification of the abovementioned issues for the proper enhancement of the disposal chains for the creation of the proper environment in the organization. Thus the CSR strategy is used for the complete formation of the organization for the purpose of mitigating the issues that are related to the enhancement of the environment related to the impacts created by the materials (Polankova, Manlig and Kralikova, 2015).
Identification of accounting standards that is relevant to the accounting standards
The main objective of the International Accounting Standards Board is to promote the International Accounting standards for the observance and acceptance so that accounting practices in different nations are harmonized. However, there is no accounting standard that deals with the accounting issues in the annual reports of the company (Rajasekaran and Lalitha, 2011). The IFRS/IAS analysis shows that are no International Accounting Standards that deals with the environment accounting. However, IFRIC 3 commonly deals with the emission rights, the IFRS 8 defines the reportable segments and IAS 38 commonly deals with impairment of the emission rights. IAS 39, IFRS 7 and IAS 32 deal with the presentation, recognition, measurement and disclosure of the financial instruments. The IFRS 6 deals with the exploration and evaluation of the mineral resources. The IAS 37 commonly deals with contingent assets, contingent liabilities and provisions. The objective of the IAS 1 is to describe the basis for the presentation of purpose of financial statements and setting out requirements and guidelines for preparation of financial statements (Rana, 2010). The risk of environment has no exception and should be handled in same way as other costs, revenues, liabilities and assets. The organizations are encouraged according to IAS 1 to furnish non financial information and other information in addition to the financial statements. Thus, the information can be in the form of the environment reports or any other statements. IA 16 provides guidance on treatment of the environmental expenditures that are related to plant, property and equipment. The paragraph 24 permits the expenditure that is related to an item of plant, equipment and property. IAS 36 commonly deals with the impairment of the assets. The impairment is the event that causes decrease in the value of the fixed assets (Reporting environmental information in annual reports, 2008). The reason behind this can be changes in the environmental legislation and the assets should be immediately written down to reflect environmental position. The IAS 36 shows that the assets impairment requires that old plant should be reviewed for the impairment. The IAS 37 contingent assets, contingent liabilities and provisions states that the conditions should be met before the provision that may be recognized (Shim et al., 2012). Therefore, is an organization created an environmental contamination then it may not be an legal obligation if the company is acting in an environmental responsible way.
Assessment of annual report of a company to analyze sustainability
In order to verify environmental accountability Woolworths Ltd has been selected and in this report the company’s CSR reporting has been investigated so that the company’s environmental friendly business activities can be recognized. The Woolworths is one of the leading Australian company and the company mainly doing business in retail sector (Soyka, 2013). As per several international rating entities Woolworths is one of the most sustainable business organization of the world. The company put great emphasis on developing as well as applying effective environmental strategies so that the company can minimized the environmental impact by the environment efficient business activities. The company can be able to reduce 40% carbon emission, which is equal to the carbon emission level of 2006. Within this period the business activities and the growth of the company is increased substantially but the company able to maintain the carbon emission rate as per 2006 (Special issue of Management Accounting Research: Risk management, corporate governance and management accounting, 2006). With the help, of the Water Wise Project the company save 200 million litres of water each years, thus reduce the use of natural resources and improve environmental sustainability. Besides this, there are reports that the company has implemented 3.4 million reusable crates in order to replace single use waxed boxes in order to reduce the use of natural resources and improve the environmental sustainability. Besides this, the company try to put efforts on zero percent wastage of food and 25% reduction in carbon emissions when delivered cartoons by Woolworths owned truck. In this way the company put great emphasis on reducing environmental impact and with effective sustainability strategies the company can be bale to minimize the environmental impact as well as improving the sustainability quotients of the company (Sullivan and Bell, 2009). The company provide priority to the following issue:
The sustainability strategies of the company help to meet the social responsibility of the business organization and help in minimizing the potential issues related to business (Tilbury and Janousek, 2006).
Conclusion
The sustainability practice is common in the contemporary business organization. There are several organizations, which are playing significant role in increasing environmental sustainability concern thus, the contemporary business organizations forced to put great emphasis developing strategies and carry out the business activities in a sustainable way so that the environmental impact can be minimized (Verma, 2008). In this way the companies reduce environmental impact by using limited natural resources and develop sustainable business activities. There are reporting styles IAS/IFRS, which have provision to report the environmental accountability. However, there are few issues, which are difficult to report with the financial reporting thus the companies try to publish separate reporting for environmental accountability thus; the companies publish the CSR report separately.
References
Anil Kumar, S., Kumar, V. and Mariyappa, B. (2010). Corporate accounting. Mumbai [India]: Himalaya Pub. House.
De Cort, M., Tollefsen, T., Marsano, A. and Gitzinger, C. (2009).Environmental radioactivity in the European Community. Luxembourg: Publications Office.
Kumar, D. and Mariyappa, B. (2010). Corporate Accounting. Himalaya Publishing House.
Miller, A. (2010). Corporate Governance and Corporate Performance: UK FTSE 350 Companies. The British Accounting Review, 42(2), pp.132-133.
Mukherjee, A. and Mohammed Hanif., (2006). Corporate accounting. New Delhi: Tata McGraw-Hill.
Pahuja, S. (2009). Environmental accounting and reporting. New Delhi: New Century.
Polankova, M., Manlig, F. and Kralikova, R. (2015). ENVIRONMENTAL REPORTING IN THE ENTERPRISE AND RELATED ISSUES. MM SJ, 2015(03), pp.691-695.
Rajasekaran, V. and Lalitha, R. (2011). Corporate accounting. Noida, India: Pearson.
Rana, G. (2010). Corporate accounting. Jaipur: ABD Publishers.
Reporting environmental information in annual reports. (2008). Copenhagen: Nordic Council of Ministers.
Shim, J., Siegel, J., Shim, A. and Shim, J. (2012). CFO fundamentals. Hoboken, N.J.: Wiley.
Soyka, P. (2013). The International Integrated Reporting Council (IIRC) Integrated Reporting Framework: Toward Better Sustainability Reporting and (Way) Beyond. Environmental Quality Management, 23(2), pp.1-14.
Special issue of Management Accounting Research: Risk management, corporate governance and management accounting. (2006). Management Accounting Research, 17(2), pp.224-225.
Sullivan, T. and Bell, C. (2009). Environmental Law Handbook. Lanham, Md.: Government Institutes.
Tilbury, D. and Janousek, S. (2006). Development of a national approach to monitoring, assessment and reporting on the decade of Education for Sustainable Development. North Ryde, N.S.W.: Australian Research Institute in Education for Sustainability.
Verma, K. (2008). Corporate accounting. New Delhi: Excel Books.
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