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Green Accounting

The Green Accounting System integrates environmental costs into financial operations to improve both economic and environmental performance of businesses. Its objectives include identifying economic costs of environmental damage, linking physical and monetary accounts, and assessing environmental costs and benefits. This system is crucial for understanding the impact of environmental changes on economic growth and for informing policy decisions.

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19 views2 pages

Green Accounting

The Green Accounting System integrates environmental costs into financial operations to improve both economic and environmental performance of businesses. Its objectives include identifying economic costs of environmental damage, linking physical and monetary accounts, and assessing environmental costs and benefits. This system is crucial for understanding the impact of environmental changes on economic growth and for informing policy decisions.

Uploaded by

jigyasaarawat2003
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Green Accounting System-

Objectives and Importance


Environmental Changes are a global problem which requires a global solution. It has
potential to slow our economic growth. The Green accounting system is considered
one of the important management systems to enable improvement of economic and
environmental performance of a business firm. In this article, we are giving the
meaning, objectives and importance of Green Accounting System which is very
useful for the competitive examinations like UPSC-prelims, SSC, State
ServicesDA,DS, and Railways etc.
Green Accounting System- Objectives and Importance

Environmental Changes are a global problem which requires a global solution. It has
potential to slow our economic growth. The Green accounting system is considered
one of the important management systems to enable improvement of economic and
environmental performance of a business firm.

What is Green Accounting System?


The Green accounting system is a type of accounting that attempts to factor
environmental costs into the financial results of operations. It has been argued that
gross domestic product ignores the environment and therefore policymakers need a
revised model that incorporates green accounting. The term was first brought into
common usage by economist and Professor Peter Wood in the 1980s. India’s
former Environment Minister Mr. Jairam Ramesh first time stressed the need and
importance to bring Green Accounting practices to the forefront of accounting in
India.
What is Objectives of Green Accounting System?
The objectives of green accounting system are discussed below:

1. To identify that part of the gross domestic product that reflects the costs
necessary to compensate for the negative impacts of economic growth, that is, the
defensive expenditures.

2. To established the linkage of Physical Resource Accounts with Monetary


Environmental Accounts

3. To assessment of Environmental Costs and Benefits

4. To accounting for the Maintenance of Tangible resources

5. To elaborate and Measurement of Indicators of Environmentally Adjusted Product


and Income

Changes in the environment have a negative bearing on not just the Environment but
on the economy as a whole. And, it is a well-known fact that changes in the economy
have a direct bearing on the changes in any business. It is also important to note that
the Gross domestic product of a country can be affected by the environmental and
climatic change.

Therefore, it is the best tool for the businesses to understand and manage the
potential quid pro quo between traditional economic goals and environmental goals.
It also increases the important information available for analysing policy issues,
especially when those vital pieces of information are often overlooked.

Hence, we can say that it is necessary for understanding of “better lose the saddle
than horse”, enterprises designing their accounting system organizations without
taking environmental costs into consideration should fulfil this requirement as soon
as possible.

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