Accounting for product take-back

Article Abstract:

Analyses of product costs must always incorporate the future disposal costs of products manufactured at present and in the past. The need for accounting for product take-back is the result of the increasing pressure for companies to be responsible for the ultimate reuse, remanufacturing, recycling or proper disposal of the products that they generate. The foundation of this current movement toward product take-back is the 'polluter pays' principle, which holds that producers of waste should be accountable for recycling or disposal. To properly account for environmental costs arising from present production, companies must identify and monitor all these costs, examine the causes of the costs through a system like activity-based costing, and identify the impacts of their products, services and activities, and report them to enable managers to arrive at good decisions.

Refuse and refuse disposal, Waste disposal, Environmental impact analysis, Environmental auditing

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"Greening" with EVA

Article Abstract:

The concept of economic value added (EVA) is a useful tool for making sound capital investment decisions about environmentally-related projects. EVA is a shareholder value metric that allows management to undertake environmentally-related projects based on complete data and analysis and develop a proactive approach to environmental stewardship while improving long-term corporate profitability. This approach is unique in that it is not bound by generally accepted accounting principles and assumes that all employees from the lowest to the highest levels of the organization have the responsibility of creating shareholder value. Successful implementation of EVA requires total commitment from senior management, a careful examination of transfer pricing and overhead allocation policies and intensive training for personnel whose bonuses are tied to EVA.

Environmental Management, Accounting Methods, Debt & Capital Management, Social Responsibility Accounting, Accounting, Capital investments, Socially responsible investments, Financial management, Environmental engineering, Managerial accounting, Social accounting

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