IFRS and Environmental Accounting

Abstract:     
This paper examines whether International Financial Reporting Standards (IFRS) can be used for monitoring environmental degradations. The paper critically examines the contemporary environmental accounting literature, and attempts to find a mandatory reporting mechanism in the contexts of accounting for a public good and REA (resource, event, action) accounting of McCarthy (1982). It selects the relevant financial reporting standards and examines their strengths and weaknesses. Using qualitative and case study research method, the financial statements of three global mining companies that are operating in an environmentally sensitive sector were studied. The study finds that the Global Reporting Initiative’s (GRI) guidelines and private sector self-regulation are insufficient to monitor environmental disclosure. The paper proposes a mandated separate statement of environmental assets and liabilities. The elements of the proposed statement are discussed.

Number of Pages in PDF File: 34

Keywords: IFRS, GRI, environmental accounting, sustainability reports, mining companies, environmental assets and liabilities, Africa

JEL Classification: M41, M42, M48, Q56, Q51 Q20 N27, D53, D63

working papers series