External costs—accounting perspective

Nowadays, shareholders would like to receive more information about companies’ activities. They would like to know how the company treats their local community, how their activities influ-ence the environment or even if the company’s activities are harmful for society. This information is needed and has to do with costs for society. Tracking these costs, called external costs, more precisely seems to be becoming more important in accounting and is starting to become a new research area. The need for treating external costs like a part of research in accounting is indicated by a trend of the accounting of social responsibility, the theory of legitimacy in accounting, the concept of full cost accounting and the directive on disclosure of non-financial information. The use of the envi-ronment isn’t free of charge for companies. According to national laws, companies are obligated to pay environmental fees or taxes when using the environment. Existing fees and taxes for using the environment don’t resolve the problems of measuring and evaluating the external costs in companies. What is important to note is that external costs are connected with using goods such as air, soil, water, silence or the aesthetics of the surroundings. They all are non-marketable goods; they don’t have prices on the market. Therefore, one of the non-market valuation methods could be used to evaluate them. One of the biggest problems for accounting in the future will be measuring the volume of using these goods or measuring the size of reduction in the quality of public goods suffered and assigning the decrease to particular companies.

Evaluating sustainable product alternatives by combining life cycle assessment with full-cost accounting: A highway guardrail case study

Full-cost accounting techniques incorporate the environmental and societal burdens a product generates through its manufacture, use, and disposal into that product’s price. This research generates full-cost prices for functionally equivalent chromated copper arsenate (CCA) treated wood and galvanized steel guardrail posts by combining previously conducted life cycle inventory analyses results with secondary emission valuation data. Based on the analysis, both CCA-treated posts and galvanized steel posts have environmental damage costs associated with emissions generated through the product’s manufacturing, use, and disposal stages. After developing full-cost prices for product alternatives, CCA-treated wood guardrail posts were found to be a more economical and environmentally responsible alternative to galvanized steel. In addition to generating full-cost prices, this research uses Monte Carlo simulation to provide estimates of variability around CCA-treated wood and galvanized steel damage costs.

UMA ANÁLISE DA PRODUÇÃO CIENTÍFICA SOBRE FULL COST ACCOUNTING

<p>Na medida em que os impactos socioambientais de uma empresa não são submetidos a um processo de medição formal, esses aspectos não são susceptíveis às decisões de planejamento ou da avaliação de desempenho da empresa. Essa invisibilidade econômica é a principal razão da utilização inadequada dos serviços ecossistêmicos. O <em>Full Cost Accounting</em> (FCA) é uma ferramenta para a mensuração das externalidades provenientes de determinada atividade, com a finalidade de incorporá-las ao processo de tomada de decisão. A presente pesquisa tem por objetivo desenvolver uma análise das pesquisas sobre o FCA publicadas nas últimas duas décadas, procurando mapear e discutir a produção científica referente ao tema. Foi realizada uma caracterização dos trabalhos, identificando os autores mais prolíficos, as principais instituições e periódicos, além das produções mais relevantes. Discutiu-se as motivações para a aplicação e dificuldades do uso do FCA. Ainda pode-se verificar que o <em>Sustainability Assessment Model</em> é o método mais indicado pelos pesquisadores e fornece uma ampla visão do desempenho, cobrindo a valoração de aspectos econômicos, ambientais, sociais.</p>