Q & A For Understanding Environmental Accounting Guidelines Contents Introduction....................................................................................................................................... 40 Question 01: What are the merits of introducing environmental accounting and reporting the results obtained?.................................................................................................................... 40 1. What is Environmental Accounting? ....................................................................................... 41 1.1 Definition ..................................................................................................................................... 41 Question 02: Please discuss what types of concepts exist in environmental accounting. ....................... 41 Question 03: What should be done for environmental accounting data which can not be expressed in terms of physical units or monetary value? .................................................................... 42 Question 04: Please explain the association between benefits in physical units and those expressed in monetary value............................................................................................................ 42 1.3 Basic Dimensions of Environmental Accounting................................................................... 43 Question 05: To what degree should traceability be maintained to ensure verification of environmental accounting? ................................................................................................................ 43 1.4 Structural Elements of Environmental Accounting................................................................ 44 Question 06: What is the relationship between environmental conservation activities and the constituent elements of environmental accounting?......................................................................... 44 Question 07: What are depreciable assets? ...................................................................................... 45 Question 08: How should investments for non-depreciable assets be handled? ................................... 45 Question 09: How should investment in financial assets be handled?.................................................. 45 Question 10: Are long-term prepaid expense and deferred assets included in the scope of investment? ................................................................................................................ 46 Question 11: Is depreciation equivalent to both investment and expense which have been categorized as environmental conservation cost? ............................................................................ 46 Question 12: What is the concept behind social cost?........................................................................ 47 2. Basic Environmental Accounting Elements............................................................................ 48 2.1 Significant of Environmental Accounting Policies................................................................. 48 Question 13: What kinds of accounting items are covered by environmental accounting guidelines?...... 48 2.2 Tarrget Period and Scope of Calculations .............................................................................. 49 Question 14: What is the concept behind basing the scope of environmental accounting on a consolidated basis? ........................................................................................................................ 49 Question 15: Please go over the practices for consolidated environmental accounting.......................... 50 Question 16: What is segment environmental accounting? ................................................................. 50 3. Measuring Cost and Benefit...................................................................................................... 52 3.1 Environmental Conservation Cost........................................................................................... 52 3.1.1 Content of Environmental Conservation Cost .................................................................... 52 Question 17: What are the standards for determining what can be recorded as an environmental conservation cost? ...................................................................................................... 52 Question 18: How are costs recognized? .......................................................................................... 52 Question 19: How should repairs of facilities or equipment be handled? .............................................. 53 3.1.2 Environmental Conservation Cost Categories.................................................................... 54 Question 20: What are the environmental conservation cost categories?............................................. 54 Question 21: What is the business area? .......................................................................................... 54 Question 22: How does the transport of goods fall under environmental conservation cost?.................. 55 (1) Business Area Cost ................................................................................................................... 56 Question 23: What is cleaner production? ......................................................................................... 56 Question 24: How should costs related to implementation of the Kyoto mechanism be treated? ............ 56 Question 25: What is the relationship between pollution prevention cost and the seven types of pollution that are recognized traditionally? .................................................................................. 56 Question 26: What is compliance cost? ............................................................................................ 57 Question 27: When should environmental conservation cost be recognized after the discovery of ground contamination?............................................................................................................ 57 Question 28: What types of measures fall under the category of environmental remediation cost? ........ 57 Question 29: What is the relation between ISO 14001 pollution prevention and environmental accounting? ................................................................................................................ 58 Question 30: From the standpoint of occupational health and safety, can environmental cost related to the prevention of noise and vibration also be included in pollution prevention cost?................ 58 Question 31: How is the cost of thermal recycling treated?................................................................. 58 Question 32: How is waste disposal cost handled? ............................................................................ 59 Question 33: As the characteristic of waste disposal cost differs from that of other environmental conservation cost, is there some way to separate it?...................................................... 59 (2) Upstream/Downstream Cost ..................................................................................................... 60 Question 34: What are upstream and downstream cost?.................................................................... 60 Question 35: How should cost be handled when materials procured through green purchasing are less expensive than conventional materials? ........................................................................ 60 Question 36: How should the contributions to industry association be handled? ................................... 61 (3) Administration Cost ................................................................................................................... 62 Question 37: What is the relationship between administration cost and social activity cost for providing information? ................................................................................................................ 62 Question 38: How is cost for maintaining and operating the environmental management system handled?..................................................................................................................... 62 Question 39: How should cost for an environmental audit be treated?................................................. 62 Question 40: How should the cost for environmental impact monitoring? ............................................. 63 Question 41: What is included in the environmental education for employees? .................................... 63 (4) R&D Cost..................................................................................................................................... 64 Question 42: How is R&D cost calculated and reported?.................................................................... 64 Question 43: What are some points to watch out for regarding R&D cost?........................................... 64 (5) Social Activity Cost.................................................................................................................... 65 Question 44: What are the focal points of social activity cost? ............................................................ 65 Question 45: Why are nature conservation cost and the cost for the planting of greenery divided into administration cost and social activity cost?................................................................... 65 (6) Environmental Remediation Cost............................................................................................