IFRS and Environmental Accounting

Abstract

Humanity has the ability to make development sustainable - to ensure that it meets the needs of the present without compromising the ability of future generations to meet their own needs." The Brundtland Commission Report International Financial Reporting Standards have become an important tool for integration of domestic accounting systems with the global ones. The G20 leaders have enforced the implementation of IFRS by 2011. Similarly, the United Nations Summit has identified the link between IFRS and environment. Increasing danger to environment, extinction of many species of plants and animals, depletion of the ozone layer and global warming due to indiscriminate use of fossil fuels emitting Green House Gas has become a reality. States which are considered as trustees of the environment for future generations are increasingly adopting the path of sustainable development in their planning process and formulating tougher regulations for industry based on the soft law developed internationally. For many companies’ environmental factors are no longer off-balance sheet risks and few companies have already set aside amounts as provisions or contributed to independent funds for decommissioning of plant assets and the rehabilitation and restoration of environment. This article focuses on IFRS contribution towards monitoring and protection of the environment as against select corporate reporting practices.