Ok so after careful considerations here is the summary of the issues surrounding green reporting.

The first objective is to be able to include in the financial statement the environmental costs and find financial incentives for companies to “go green”.  The first issue is that this kind of costs are usually expensed. However, if environmental costs meet the criteria for asset it should be capitalized. An asset is a resource controlled by a company arising from a past event and from which future economic benefit are expected to flow in the company,

Then environmental assets are environmental costs and can be capitalized, which can be a huge incentive for companies to find and use new sustainable energies and infrastructure.


However, what i also find out that the Canadian Institute of Charted Accountants doesn’t really encourage companies to report environmental asset or liabilities because the measurements are inconsistent and there is an absence of specific guidance dealing w and that environmental costs are different from other costs because they produce a future benefit that is not purely economical.

I am pleased to see that the issues are being discussed. This makes me want to be an accountant and research, fight and make a change in the Canadian system.

Advertisements