Disadvantages Of Environmental Accounting

(A) Disadvantage of Environmental Accounting & Reporting:

1. Environmental accountings have no economic value.
2. The method of estimating the social value of environmental goods and services are imperfect, often misleading and construers.
3. Estimated values for environmental goods quantified or qualified in terms which have no fixed conversion into money.
4. On account of unrecorded environmental costs and difficulty in extracting and separating environmental cost the industry data is virally unreliable.
5. Social value placed on environmental goods and services are changing so fast that the estimates are likely to be obsolete before they are available for use.
6. Lack of accounting standards for environmental accounting
7. Inapplicable

It is encouraging to note that a developing country such as Bangladesh is trying to make efforts to experiment with this new area of corporate reporting. It may be said that the efforts made by the Bangladeshi companies to make environmental disclosures are noteworthy and deserve appreciation, but it is observed that in most cases the quantity and quality of disclosures were less satisfactory and poor. The following are the recommendations based on the findings of the study:

 Companies have already given much effort in the field of environmental protection but the current accounting system does not reflect such efforts for its stakeholders. So, Companies should take the initiative showing such activities in their accounts.
 Environmental expenditures incurred by companies should be classified into capital expenditures [e.g. Purchasing a new Recycling Machine] and operating expenditures [e.g. annual operating and maintenance cost of the Recycling Machine].
 High tendency of profitability should be ignored to think about environment and to practice environmental accounting in their accounting

Sustainability of Environmental Accounting can be maintained only by practicing a well formed environmental reporting system. Based on my findings I have found that most of the companies report environmental accounting in qualitative information format, none of those include environmental accounting in reporting system in their annual report. So, I would like to suggest a primary level sample of new reporting system (next page) of accounting with the combination of environmental reporting and conventional reporting