Page 322 - Ebook HTKH 2024

4. Environmental Cost Accounting In Various Countries And Lessons For
Northern Vietnam’s Textile Enterprises

4.1. Environmental cost accounting in various countries
The United States Environmental Protection Agency (EPA) and the Tellus
Institute (USA) were among the first organizations to research and apply environmental
accounting in industrial organizations to demonstrate its benefits (USEPA, 1995 a). In
the early stages, several studies were conducted, many of which originated from the
United States and a few from Europe. Subsequently, governments of countries such as
the Netherlands, Denmark, Germany, Austria, China, and Japan also promoted the
research and application of environmental cost accounting in enterprises within their

nations.
Environmental Cost Accounting in Enterprises in the United States:
Environmental accounting in the United States emerged in 1972, focusing on
national-level accounting, and began research at the enterprise level in 1990. It
subsequently developed strongly and had a wide influence on the development of other
countries worldwide. The 1990 environmental accounting framework was considered a

foundational document for drafting frameworks by the United Nations Commission on
Sustainable Development (UNDSD), the International Federation of Accountants
(IFAC), and many other countries.
Environmental accounting in the United States primarily focuses on environmental
costs to aid managerial decision-making, providing information to prepare
environmental reports to meet the requirements of the U.S. Securities and Exchange
Commission, and helping enterprises avoid penalties. Additionally, recognizing and

disclosing environmental cost accounting information in financial reports is carried out
according to FASB regulations, which state: “Environmental cost accounting is
identified in companies depending on the extent and scope of information usage.”
In American enterprises, environmental costs are categorized and determined
according to a five-level scale guided by the Environmental Protection Agency (EPA):
traditional costs, hidden costs, contingent costs, and image-related costs, with social

costs not being identified within internal enterprise costs. The ECOMAC research
project on environmental accounting in the European Union (EU) and the United States
indicated that 64% of American companies recognize environmental costs, but this
recognition mainly focuses on evident environmental costs such as energy and waste
treatment, while less attention is given to fines and insurance costs.
Environmental costs are recorded in general accounts, then calculated and
recorded for specific cost-bearing entities. Research also indicated that, in European
companies, environmental cost information primarily comes from operational

management systems, such as the company’s production process. Only 19% of
companies reported that environmental cost information came from the accounting
system, which is a significant difference compared to American companies. In the

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