Şerafettin SEVİM
Department of Business Administration
Faculty of Economics and Administrative Sciences
Dumlupinar University- Kutahya/TURKEY
0-274-2652193 (2074)
ssevim@dumlupinar.edu.tr
 
 
Orhan ELMACI
Department of Business Administration
Faculty of Economics and Administrative Sciences
Dumlupinar University- Kutahya/TURKEY
0-274-2652193 (2004)
oelmaci@tavmyo.edu.tr
 
     
Niyazi KURNAZ
Department of Business Administration
Faculty of Economics and Administrative Sciences
Dumlupinar University- Kutahya/TURKEY
0-274-2652193 (2066)
nkurnaz@dumlupinar.edu.tr

Tansel ÇETİNOĞLU
Department of Business Administration
Faculty of Economics and Administrative Sciences
Dumlupinar University- Kutahya/TURKEY
0-274-2652193 (2066)
tansel@dumlupinar.edu.tr


THE ENVIRONMENT COST ANALYSIS IN FOCUSING THE GENETIC CODES OF INDUSTRIAL FIRMS INTO FUTURE

ABSTRACT

By disregarding their eco-systems, the firms desire to develop the enlargement and strategically actions to single out the benefit has distorted the ecologic balance persistently. The distorted ecological balance has transformed into the phenomenon to threaten all world by means of synergic effects. By the arbitrary use of the natural resources by the economic actors resulted in the environmental issues with the geometrical aggregation. In this context, almost all disciplines has begun to investigate the environment protection. The accounting also is not insensitive to this subject-matter, thus, “Environment Accounting” has positioned within the literature.

The costs of environment protection is in micro-level has gained significance. The environment motive effects the genetic codes of the firms directly or indirectly. The attempts of the protection for the environment, the exact fixation of the action costs, the awareness of the cost components and the indication of the precautions within the fiscal tables are very important factors.[1] In this study, respectively, the cost of the environment protection for the firms, the position of the environment costs within the International Accounting Standards and the extent of the environment cost within the internal and external reporting and how the manager should use these information will be evaluated.

Key Words: Genetic Codes, Costs of  protecting environment (future), Sustainable competition power, Cost advantage, Environmental effects, Environment Cost Management, Internal / External Reporting.

 

I- INTRODUCTION

 

By disregarding their eco-systems, the firms desire to develop the enlargement and strategically actions to single out the benefit has distorted the ecologic balance persistently. The distorted ecological balance has transformed into the phenomenon to threaten all world by means of synergic effects. By the arbitrary use of the natural resources by the economic actors resulted in the environmental issues with the geometrical aggregation. In this context, almost all disciplines has begun to investigate the environment protection. The accounting also is not insensitive to this subject-matter, thus, “Environment Accounting” has positioned within the literature.

It is possible to analyses the costs of the environment protection within the micro and macro level. In macro level, the fixation of the nature’s usage price by the user, remove the idea of the exploitation, indicate the natural values with the national accounts, and take the precautions which are preventive and future-oriented.[2]

The costs of environment protection is in micro-level has gained significance. The environment motive effects the genetic codes of the firms directly or indirectly. The attempts of the protection for the environment, the exact fixation of the action costs, the awareness of the cost components and the indication of the precautions within the fiscal tables are very important factors.[3] In this study, respectively, the cost of the environment protection for the firms, the position of the environment costs within the International Accounting Standards and the extent of the environment cost within the internal and external reporting and how the manager should use these information will be evaluated.            

II- THE CLASSIFICATION OF THE ENVIRONMENTAL PROTECTION COSTS OF THE ENTERPRISE

The potential of an enterprise to be able to use its assets to increase the level of general efficiency and financial superiority determines the “competence” of that enterprise. Being regarded as an essential competence requires uniqueness, authenticity and the quality of environmental protection. Moreover, it should have the ability of establishing harmony with the environment. That is, the cost of environment is an important criteria for successful the environmental protection.[4]

            Environmental costs can be different from each other. Some of them appear at the end of the activities realized to protect the environment whereas some of them appear due to the uses of environmental sources. Also, there are some others appearing because of the environmental pollution caused by the enterprises. Thus, the environmental costs can be shown like below;[5]

i.                     The Reduction Costs

ii.                   The Usage Costs

iii.                  The Damage Costs

also, the costs of environmental protection can be divided into two groups as “private costs” and “societal costs”. This classification can be seen below as in the figure 1.[6]

-    Upfront Costs -    Regulatory Costs -    Voluntary Cost -    Back-End Costs -    Activity Costs -    Gray Zone Costs -    Hidden Costs -    Exit Costs -    Liability Costs -    Environmental Obligations -    Less Tangible Costs

-       Insurance & Material Costs -       Costs caused by the rejections of the deficient materials -       Costs spent for compensating the consumer complaints -       Costs spent for the accurate use of the product and the its advertisement -       Costs spent for the education of the employees about the liability of the product and efforts to make participate.

           

Figure 1- The Classification Of  The Environmental Protection Costs Of The Enterprise

 

The environmental protection costs are divided into four groups as prevention costs, valuation costs, internal-error costs, and external-error costs in view of the Total Quality Management.[7]

Relation of genetic codes and environmental costs can be seen below as in the figure2;

Genetic Codes	Environmental Relations	Costs
Customer	Marketing	Environmental Costs
Technology /Product  Process	Tangible/intangible Fixed Assets	Environmental Investments
Product	Cost of Service Rendered	Environmental Costs
Human Resources	General Administration Expenses / Functional	Environmental Costs
Management / Organization Culture	General Administration Expenses / Functional	Environmental Costs

Use to environmental costs affect of  genetic codes;

Environmental Costs                     Genetic Codes                  increase of market value, Customer Potential, Customer allegiance / faithfulness, increase of  sales, product preference and increase the value of the firm in long term.

III- THE PLACE OF THE ENVIRONMENTAL ROTECTION COSTS AMONG THE INTERNATIONAL ACCOUNTING STANDARTS

National and international accounting organizations have started to take actions due to the gradual increasing of the importance of the accountants in the environmental problems faced by the institutions.[8]

According to the report of Environmental Protection Agency (EPA), the approach of environmental accounting has different areas and usages in national-income accounting, financial accounting and management accounting.[9]

As it is stated in the definition of the IASC, environmental Protection costs involve the costs spent for the activities of the institutions to protect the environment.[10]

Environmental costs and responsibilities do not have to be explained and showed according to the International Accounting Standards (IAS 5). However, the environmental costs that are both important and can affect the decisions which will be given from the 8^th item should be explained and showed under a different column.[11]

In the report of the ICAEW (Institute of Chartered Accountants in England and Wales) titled “Environmental Issues in Financial Reporting”, it is emphasized that the costs decreasing and preventing the damage to the environment should be taken into consideration.[12]

In the 16 th item of IAS, the importance of the measurement of the equipment and installation[13] and in the 8 th item of IAS-5 the administrative fines related with pollution and issuing have been stated.[14]

IV- THE PLACE OF THE ENVİRONMENTAL COSTS OF THE ENTERPRİSE IN THE INTERNAL AND EXTERNAL REPORTING

The complex accounting of the environmental costs of the enterprise in different areas and activities counters with the basic principles of accounting. However, the common accounting and recording of the environmental costs provides neither regular control nor accurate reporting to the related persons.

Thus the information related with environmental costs which have creasing importance should be taken into consideration very carefully and their accounting should be shown separately and clearly in the financial records.

To be able to show the environmental information in the chart of accounts, these information should be documented. The second step coming after the documentation is recording. The documents about the environmental protection costs should be recorded and shown in the chart of accounts. Unfortunately, there is no separate detail account in the recent chart of accounts.

Recently, there have been some researches about the environmental protection in the view of the 750 Cost of Research and Development, but they are used in the field of production of the enterprises.

When this point is analyzed within the view of environmental accounting and the principles stated in the accounting practice, the real state of the enterprises should be reflected and the environmental control should b e done regularly. Moreover, all of these activities and information should be accounted and shown in the chart of accounts and financial reports.

In the field of environmental protection activities, enterprises try to prevent the pollution created by themselves by realizing investments having the quality of fixed assets. These kind of investments should be in the active part of the balance sheet of the enterprise. Two suggestions should be proposed to activate the accounts.

i.                            While activating the environmental costs, the investments accounts should be used and when the investment is completed, it should be transferred in to the suitable active chart of accounts which is in the group of tangible  fixed assets numbered 25. the activities realized with the aim of improving the environmental protection should also be activated  and transferred into the group of intangible fixed assets numbered 26.[15]

ii.                          To be able to minimize the possible negative reactions of the public, to emphasize the importance of adaptation of the products and the enterprises to the surroundings during the exportation and to increase the value of the institution in the eyes of the partners, the environmental costs and the activities and researches done to improve these costs should be shown in a separate chart of accounts. This  accounts may be “environmental costs”,      “environmental protection investments” or  “ future protection investments”.

Briefly, there are two  important arguments  related with environmental protection costs. First one is the private or internal costs related with the events of profit and deficit (loss) affecting directly. The second one is the societal costs affecting the results of the activities indirectly.

With the gradual increasing of the environmental conscience, the expenses and costs of the enterprises to protect the environment is increasing day by day. Thus, these kind of costs should not be assessed with in the general costs, but they should take place in the quality costs.

The environmental protection  costs are divided into two as private / internal and societal costs. These costs have not been related with the production directly so for. However, due to the changing enterprises and the surrounding of product, the environmental costs are obliged to be shown in a separate account.

If the enterprises use the choice of 7/A in the regular chart of account, they should take  the environmental costs into the functional accounts and if they use choice of  7/B, they should take them into the account numbered 79.

V- RESULT / CONCLUSION

The enterprises have realized that they are depleting the natural sources and polluting the environment, for these reasons they are damaging the balance of nature. This awareness is very important both for the public and the National Environmental Regulations. The administrators should take more efficient decisions and become conscious about these development process by considering the principles of “ social responsibility” and the concept of “ substance over form” in the internal / external reporting. Otherwise, the enterprises will not only lose the power of competition but they also disappear forever from stage.

BIBLIOGRAPHY / SOURCES:

Esra Nemli, Çevreye Duyarlı İşletmecilik ve Türk Sanayinde Çevre Yönetim Sistemi Uygulamaları, İstanbul Üniversitesi S.B. F., İstanbul, Kasım 2000.

Hilmi Kırlıoğlu,A.Vecdi Can, “Çevre Muhasebesi ” Değişim Yayınları, Adapazarı, 1998.

Johan Pret, (Çev:, Mehmet Özbirecikli), “Çevresel Sorunlarda ve Sürdürülebilir Kalkınmada Muhasebecinin Rolü-II, Örgütlenmiş muhasebe Meslek Mensuplarının Katkısı”, MUFAD Dergisi, Temmuz 2000, S. 1, İstanbul.

Lerzan Akün (Kavut), “Çevre Muhasebesi: Genel Bir Bakış”, Muhasebe Bilim Dünyası Dergisi, MODAV, C. 1, S. 1, Nisan 1999.

Mehmet Özbirecikli, “Çevre Muhasebesi Kavramı ve Yönetsel Kararlara Katkıları”, MUFAD Dergisi, Temmuz 2000, S. 7, İstanbul.

Mehmet Özbirecikli, Çevre Muhasebesi, Natürel Kitap ve Yayıncılık, Ankara, Nisan 2002.

Oktay Güvemli, Ümit Gökdeniz, “ Çevre Muhasebesindeki Gelişmeler ” MÖDAV, Sayı:4, İstanbul, Ekim 1996.

 Orhan Elmacı, “Küresel Boyutlu Stratejik Planlama ve Rekabet Gücü Analizi”, Boğaziçi Üniversitesi Endüstri Mühendisliği, İstanbul, 7-9 Temmuz, 1993. 

Orhan Elmacı, Niyazi Kurnaz, “Sürdürülebilir rekabet Gücüne Yönelik Vizyon Arayışlarında Faaliyet Tabanlı Maliyetleme (FTM) Yaklaşımı”, Selçuk Üniversitesi, ÜAS’04, IV. Ulusal Üretim Araştırmaları Sempozyumu, Günay Ofset Matbaacılık ve Tic. Ltd. Şti.,  8-10 Ekim 2004, Hilton-Konya.

Süleyman Yükçü, Kalite Maliyetlerinin Muhasebeleştirilmesi, Anadolu Matbaacılık, İzmir, 1999.

Yunus Kishalı, Hilmi Kırlıoğlu, “Çevresel Yönetim Sistemleri ve Çevresel Denetimde Uluslar arası Standartlar; Sanayi Sonrası Toplumda Muhasebenin Rolünün Genişletilmesi”, MUFAD Dergisi, Nisan-1999.

 

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