Page 323 - Ebook HTKH 2024

U.S., 51% of companies indicated that environmental cost information came from both
management accounting and financial accounting systems.

Environmental Cost Accounting in Enterprises in Germany:
Germany is one of the most industrially developed countries globally, but it also
faces numerous environmental pollution issues caused by manufacturing plants and
heavy industrial zones. These negative environmental issues have pressured changes in
German environmental policies. Germany has enacted various laws requiring
manufacturing enterprises to pay considerable attention to environmental costs, such as
the Recycling and Waste Law, the Environmental Liabilities Law, and the Product
Liabilities Law, mandating that manufacturers are responsible throughout the product

life cycle.
To comply with these laws and minimize the risk of fines and litigation, German
enterprises are recommended to apply Material Flow Cost Accounting (MFCA)
according to the guidelines on environmental accounting for corporate management
goals, published by the German Ministry of Environment in 1996.
Environmental cost accounting in Germany is based on ecological balance,

requiring the provision of information primarily in material and physical measures and
focusing on environmental costs and energy flows, such as accounting for input and
output flows of materials, energy, and water to efficiently use resources. Information on
material, energy, and water flows serves internal managers to make decisions related to
resource efficiency and to prepare environmental reports for external stakeholders.
In German enterprises, besides accounting systems, operational management
systems also provide useful environmental cost information, especially for those

applying material flow cost accounting. Enterprises also maintain environmental
budgets, clearly recording and tracking environmental costs such as energy and waste
treatment, but they pay less attention to fines and environmental insurance costs. The
common environmental cost accounting model applied in Germany is the material flow
cost accounting model (MFCA). Costs in enterprises are analyzed by material flows,
including material costs, system costs, supply and disposal costs. Depending on the

production characteristics and management requirements of each enterprise, appropriate
cost centers are chosen for analyzing material flow costs.
Environmental Cost Accounting in Enterprises in Japan
The Ministry of the Environment (MOE) and the Ministry of Economy, Trade, and
Industry (METI) in Japan play significant roles in the establishment, development, and
dissemination of environmental accounting. The evolution of environmental cost
accounting is reflected in the overall development of environmental accounting with the
primary aim of serving internal business purposes. Japanese enterprises mainly

implement environmental cost accounting according to MOE guidelines.
Environmental costs are recognized by enterprises as the total investment in
environmental initiatives (equipment, research and development) and environmental
expenses over a certain period. Environmental costs are categorized by activity,

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