Accounting challenges for sustainability and innovations
Accounting challenges for sustainability and innovations
Contributor(s): Marzena Remlein (Editor)
Subject(s): Economy, Business Economy / Management, Energy and Environmental Studies, Sociology, Management and complex organizations, Sociology of the arts, business, education, Economic development, Environmental interactions, Financial Markets, Accounting - Business Administration, Marketing / Advertising, Business Ethics
Published by: Wydawnictwo Uniwersytetu Ekonomicznego w Poznaniu
Keywords: accounting;sustainable developement;Corporate Social Responsability (CSR);environmental management;reporting accounting;non-financial reporting (NFR);investments;external costs;derivatives;research and development;cryptoassets;
Summary/Abstract: The aim of this e-book is to present the most important aspects related to sustainability, corporate social responsibility and innovation from an accounting perspective. The book contains parts that deal with accounting aspects of sustainability and innovations. The book consists of ten chapters devoted to relevant and topical issues of sustainability and innovations. Chapter 1 'Sustainability and Corporate Social Responsibility in accounting' is an introduction to further considerations and deals with the essence of sustainable development, corporate social responsibility and their recognition in accounting. Chapter 2 'Social responsibility reporting standards' presents the most important reporting guidance such as GRI, OECD, United Nations Global Compact, International Organization for Standardization. Chapter 3 'Narrative reporting' focuses on descriptions and explanations in accounting reports. The chapter presents the links between accounting and language, the development of accounting narratives and the factors determining the use of narratives. Chapter 4 'Integrated reporting' discusses the motivations, objectives and the process of preparing an integrated report. Integrated reporting can prove to be an effective tool for businesses looking to shift their reporting focus from annual financial performance to long-term shareholder value creation. Chapter 5 'Non-financial reporting' in selected European countries presents the experience of Croatia, the Czech Republic and Poland in the field of preparing non-financial reports. A significant contribution to promoting the importance of sustainability reporting was made by the Non-Financial Reporting Directive (2014/95/EU). Chapter 6 'Socially responsible investments' discusses the essence of socially responsible investing and socially responsible investment. Socially responsible investing (SRI) is a decision making process concerning the allocation of free financial resources, where the investor aims at maximization of profit and minimization of risk on one part and includes the socio-ethical and environmental-ecological considerations on the other. Chapter 7 'External costs – accounting perspective' describes costs connected with using goods such as air, soil, water, silence or the aesthetics of the surroundings. One of the biggest problems for accounting in the future will be measuring the volume of using these goods or measuring the size of reduction in the quality of public goods suffered and assigning the decrease to particular companies. Chapter 8 'Derivatives in accounting' is devoted to financial instruments and presents two different approaches to accounting of derivatives: general model and hedge accounting. Derivatives are used to protect the enterprise against financial risk related to changes in prices on the markets, changes in the exchange rate or changes in interest rates, as well as for commercial purposes. Chapter 9 'Costs of research and development' shows the company's activity in the field of research and development and the related costs. R&D constitute an increasingly important element of the functioning of enterprises. Chapter 10 'Cryptoassets – nature, valuation and disclosures in accounting' focuses on cryptocurrencies (e.g. Bitcoin, Ethereum etc.) and digital tokens which are specific rights or values representatives. As a result of the transformation on the financial market, we are currently dealing with cryptoassets, which are a creation of blockchain technologies and the changing habits of the digital society. One of areas that there are a lot of doubts regarding these new technological solutions is accounting.
- E-ISBN-13: 978-83-8211-055-5
- Page Count: 188
- Publication Year: 2021
- Language: English
Sustainability and Corporate Social Responsibility in accounting
Sustainability and Corporate Social Responsibility in accounting
(Sustainability and Corporate Social Responsibility in accounting)
- Author(s):Nikolina Dečman, Marzena Remlein, Ana Rep
- Language:English
- Subject(s):Economy, Business Economy / Management, Energy and Environmental Studies, Accounting - Business Administration, Marketing / Advertising, Business Ethics
- Page Range:11-25
- No. of Pages:15
- Keywords:accounting;sustainable development;Corporate Social Responsibility (CSR);environmental management;global corporate responsibility reporting;social responsibility accounting;
- Summary/Abstract:The term sustainable development is understood as such socio-economic development in which the process of integrating political, economic and social activities takes place, while maintaining natural balance and the durability of basic natural processes, in order to ensure the possibility of satisfying the basic needs of individual communities or citizens of both the modern generation, and future generations. Sustainable development has three dimensions: ecological, economic and social. A consequence of the growing importance of social and ecological aspects of business operations is the increased interest and requirements for reporting, understood as a set of reports containing both financial and non-financial information. This chapter covers the concept of sustainable development, CSR and explains the role, goals and challenges of social responsibility accounting. CSR reporting has become some kind of a trend in non-financial reporting. Many large international companies make great efforts to prepare CSR reports in order to transparently communicate with their stakeholders as well as strive to achieve established social and environmental goals. CSR covers different aspects of business, with, among other things, environmental issues being highlighted. The importance of green accounting has been recognized globally where the adoption of the 2014/95/EU Directive has just further raised awareness of the importance of reporting on the environment and environmental activities. This chapter covers the basic concept and development phases of sustainable and environmental accounting, explains the role of green accounting in modern business conditionsand discusses the benefits and opportunities it provides to interested users.
Social responsibility reporting standards
Social responsibility reporting standards
(Social responsibility reporting standards)
- Author(s):Ana Rep, Nikolina Dečman
- Language:English
- Subject(s):Economy, Business Economy / Management, Energy and Environmental Studies, Accounting - Business Administration, Marketing / Advertising, Business Ethics
- Page Range:27-43
- No. of Pages:17
- Keywords:CSR reporting;Global Sustainability Frameworks;Global Sustainability Standards;OECD Guidelines;GRI;SDGs;UN Global Compact Principles;
- Summary/Abstract:It is well known that today, in addition to already established financial reporting, multinational companies are paying more and more attention to non-financial reporting on social, economic, environmental and governmental issues. Corporate Social Responsibility (CSR) reportingis still predominantly voluntary, and it is not standardized. However, there are various international organizations which have been developing frameworks and voluntary standards for non-financial reporting. Those organizations have been putting a sizable amount of effort, time, and knowledge in order to offer some specific solutions to interested organizations preparing CSR reports. Proposed standards, guidelines, and frameworks serve as tools for simplifying CSR reporting. In that sense, the most important providers of sustainability reporting guidance, such as GRI, OECD,United Nations Global Compact, International Organization for Standardization, certainly standout. A significant contribution to promoting the importance of sustainability reporting was also made by the Non-Financial Reporting Directive (2014/95/EU) which obliged large public interest companies with over 500 employees to disclose certain non-financial information. According to the analysis of the content and scope of the most important frameworks and standards of sustainability reporting, it can be confirmed that they have certainly contributed to improving the qualityof non-financial reporting.
Narrative reporting
Narrative reporting
(Narrative reporting)
- Author(s):Katarzyna Czajkowska, Marek Masztalerz, Ana Rep
- Language:English
- Subject(s):Economy, Business Economy / Management, Energy and Environmental Studies, Theoretical Linguistics, Accounting - Business Administration, Marketing / Advertising, Business Ethics
- Page Range:45-60
- No. of Pages:16
- Keywords:accounting;communication;language;materiality principle;narrative reports;narratives;reporting accounting;transparent reporting;
- Summary/Abstract:For years financial and management accounting reports were based primarily on “hard” numbers. Extensive written descriptions and explanations were not common in practice. However, inrecent decades there has been a significant shift towards “softer” and more narrative communicationin accounting. The purpose of the chapter is to identify and describe the determinants of the developmentof accounting narratives in practice, and to explain why narratives are gaining importance inaccounting communication. The chapter presents the links between accounting and language, the development of accounting narratives and the factors determining the use of narratives. Narratives give economic units the opportunity to explain the situation and the achieved financial results. The use of narratives helps to better meet the information needs of stakeholders. There are still many challenges ahead of narrative financial reporting, such as determining the minimum content of reports, ensuring comparability of reports or the issue of external control of narrative financial reporting. An insufficient application of professional accounting materiality judgment is considered as one of the main causes of disclosing too much irrelevant information and not enough relevant information. Preparers of narrative reports should be aware that without applying materiality principle the information disclosed in the reports are not considered transparent and stakeholders lose confidencein such companies.
Integrated reporting
Integrated reporting
(Integrated reporting)
- Author(s):Libor Závodný
- Language:English
- Subject(s):Economy, Business Economy / Management, Energy and Environmental Studies, Accounting - Business Administration, Marketing / Advertising, Business Ethics
- Page Range:61-72
- No. of Pages:12
- Keywords:business model;intangible assets;integrated reporting;value creation;
- Summary/Abstract:Companies struggle to communicate value through traditional reporting. Integrated reporting can prove to be an effective tool for businesses looking to shift their reporting focus from annual financial performance to long-term share holder value creation. Such a shift should cover the demand from investors for a structured reporting framework that goes beyond the traditional financial reporting. The International Integrated Reporting Framework will encourage the preparation of a report that shows business performance against strategy, explains the various capital used and affected, and gives a longer term view of the organization. The framework will be attractive to companies who wish to develop their narrative reporting around the business model to explain how the business has been developed. Integrated reporting attained various degrees of popularity depending on the geographical regions. While it is mandatory for all companies listed in South Africa’s stock exchange, in other regions it is used by businesses on voluntary basis. Research shows that in the USA the adoption of integrated reporting is slower than in most of theother developed regions.
Non-financial reporting in selected European countries
Non-financial reporting in selected European countries
(Non-financial reporting in selected European countries)
- Author(s):Nikolina Dečman, Petr Petera, Marzena Remlein, Ana Rep
- Language:English
- Subject(s):Economy, Business Economy / Management, Accounting - Business Administration, Marketing / Advertising, Business Ethics
- Page Range:73-90
- No. of Pages:18
- Keywords:Directive 2014/95/EU;annual reports;non-financial reporting (NFR);questionnaire research;standalone corporate responsibility reports;web pages;Polish Standard of Non-Financial Information (SIN);
- Summary/Abstract:Directive 2014/95/EU gave the EU Member States a certain flexibility when transposing it into national law. Each Member State could, therefore, decide to introduce regulations of varying degrees of stringency. According to Directive 2014/95/EU, large companies have to publish reportson the policies they implement in relation to environmental protection, social responsibility and treatment of employees, respect for human rights, anti-corruption and bribery, diversity on company boards (in terms of age, gender, educational and professional background). In order to satisfy the EU rules, the Republic of Croatia has implemented into its legislation the provisions of the Directive 2014/95/EU regarding the disclosure of certain non-financial reporting,by amending the Accounting Act. Some companies registered in Croatia have been disclosing some of the required non-financial information in their reports even before the effective date of the Directive,but conducted studies conclude that there is still a room for improvements.This chapter provides a short overview of regulation of non-financial reporting in the Czech Republic as well as overview of previous research on non-financial reporting in this country. The results of the research present that few Czech companies publish standalone corporate responsibility report. More popular is the disclosure of non-financial information within annual financial reports but even this approach is pursued by less than half of respondents. The amount of disclosed information in annual reports is mostly up to 5 pages. 11 companies (10.38%) provide more than 5 pages of environmental information and only 7 companies (6.60%) provide more than 5 pages of social information. In Poland, the requirement to present non-financial information relating to CSR was introducedby the Accounting Act. Public trust entities are required to present in the report on the activities a separate part called “Statement on non-financial information”. In 2017, the Polish Standard of Non-Financial Information (SIN, 2017) was published to help enterprises fulfil their obligations under the EU Directive.
Socially responsible investments
Socially responsible investments
(Socially responsible investments)
- Author(s):Marzena Remlein
- Language:English
- Subject(s):Economy, Business Economy / Management, Sociology, Economic development, Environmental interactions, Accounting - Business Administration, Marketing / Advertising, Business Ethics
- Page Range:91-106
- No. of Pages:16
- Keywords:Eurosif;GSIA;motives for SRI;socially responsible investments (SRI);strategy of SRI;
- Summary/Abstract:Socially responsible investing (SRI) is a decision making process concerning the allocation of free financial resources, where the investor aims at maximization of profit and minimization of risk on one part, and includes the socio-ethical and environmental-ecological considerations on the other. We can find four types of motives, describing them as mobilizing forces to undertake SRI. The seare psychological and social, legal, economic and strategic, financial. Investors invest their funds in such investments by choosing the right investment strategy for them. We can find many different classifications relating to strategies and actions within the framework of SRI. The most important classifications of the SRI strategy were prepared by Global Sustainable Investment Review and Eurosif. These two organizations prepare also reports on SRI in the world and in Europe. The European market has the largest share in the global SRI market but the most dynamically developing market is Japan.
External costs – accounting perspective
External costs – accounting perspective
(External costs – accounting perspective)
- Author(s):Ewelina Kuberska
- Language:English
- Subject(s):Social Sciences, Economy, Business Economy / Management, Sociology, Management and complex organizations, Economic development, Environmental interactions, Accounting - Business Administration, Marketing / Advertising, Business Ethics
- Page Range:107-116
- No. of Pages:10
- Keywords:accounting for externalities;corporate reporting;directive on disclosure of non-financial information;evaluation in accounting;external costs;full cost accounting;sustainability accounting;
- Summary/Abstract:Nowadays, shareholders would like to receive more information about companies’ activities. They would like to know how the company treats their local community, how their activities influencethe environment or even if the company’s activities are harmful for society. This information is needed and has to do with costs for society. Tracking these costs, called external costs, more precisely seems to be becoming more important in accounting and is starting to become a new research area.The need for treating external costs like a part of research in accounting is indicated by a trend of the accounting of social responsibility, the theory of legitimacy in accounting, the concept of full cost accounting and the directive on disclosure of non-financial information. The use of the environment isn’t free of charge for companies. According to national laws, companies are obligated to pay environmental fees or taxes when using the environment. Existing fees and taxes for using the environment don’t resolve the problems of measuring and evaluating the external costs in companies. What is important to note is that external costs are connected with using goods such as air, soil, water,silence or the aesthetics of the surroundings. They all are non-marketable goods; they don’t have prices on the market. Therefore, one of the non-market valuation methods could be used to evaluate them. One of the biggest problems for accounting in the future will be measuring the volume of using these goods or measuring the size of reduction in the quality of public goods suffered and assigning the decrease to particular companies.
Derivatives in accounting
Derivatives in accounting
(Derivatives in accounting)
- Author(s):Katarzyna Czajkowska, Dawid Obrzeżgiewicz
- Language:English
- Subject(s):Economy, Business Economy / Management, Energy and Environmental Studies, Accounting - Business Administration, Business Ethics
- Page Range:117-132
- No. of Pages:16
- Summary/Abstract:One type of financial instruments are derivatives whose price depends on the value of the underlying instrument. There are two different approaches to accounting of derivatives: general model—in which derivatives are presented as assets or financial liabilities, measured at fair valueand referred to the financial result, and hedge accounting—which requires symmetrical recognition of changes in the value of the hedged item and the hedging instrument. Information on derivatives is presented in the financial statements. The derivative is reflected in the balance sheet of the entity that is a party to a given contract, while the result obtained on the derivative contract is presented in the profit and loss statement.
Costs of research and development
Costs of research and development
(Costs of research and development)
- Author(s):Artur Jastrzębowski, Jiří Pospíšil
- Language:English
- Subject(s):Economy, Business Economy / Management, Energy and Environmental Studies, Economic development, Environmental interactions, Accounting - Business Administration, Marketing / Advertising, Business Ethics
- Page Range:133-158
- No. of Pages:26
- Keywords:costs;costs of development work;cost of research and development works;cost of research works;CZ GAAP;financial reporting;IFRS;R&D;
- Summary/Abstract:Year by year, research and development works constitute an increasingly important element of the functioning of enterprises. Appropriate recording of expenditure and settlement of their effects requires (above all) determination of the actual stage of works. Consequently, there is a distinction between research and development works. Another aspect that determines the principles of recognizing expenditure in the accounting books is to determine whether the developed product/technology belongs to the area economically developed by the unit or to the unrecognized area. The adequate determination will help to place expenses either in the sphere of activity and basic unit orin the sphere of other operating activity. Financial reporting for intangible assets is perhaps one of the most difficult and most controversial topics of financial reporting. In this article it is compared three concepts of financial reporting for R&D costs: IFRS approach, Czech approach for non-profit organizations and Czech approach for profit organizations.
Cryptoassets – nature, valuation and disclosures in accounting
Cryptoassets – nature, valuation and disclosures in accounting
(Cryptoassets – nature, valuation and disclosures in accounting)
- Author(s):Piotr Druszcz, David Procházka
- Language:English
- Subject(s):Economy, Business Economy / Management, Financial Markets, Accounting - Business Administration, Marketing / Advertising, Business Ethics
- Page Range:159-188
- No. of Pages:30
- Keywords:accounting;Bitcoin;blockchain;cryptoassets;cryptocurrency;IFRS;tokens;valuation;
- Summary/Abstract:Within cryptoassets we can find cryptocurrencies (e.g. Bitcoin, Ethereum) and digital tokens which are specific right or value representatives. One of areas that there are a lot of doubts regarding these new technological solutions is accounting. It is not clear how we can classify particular groups of cryptoassets and how to value them in financial statement. The aim of the chapter is to present the essence, use and valuation issues of cryptoassets and also to review the definitions of selected asset groups in the currently applicable accounting regulations to identify those asset groups to which cryptocurrencies can be classified. The chapter also discusses available accounting models under IFRS,with a major focus being put on the recognition and presentation in balance sheet. The assessment of models is based on distinguishing different types of tokens (payment, security, utility) as well as on differentiating between holders’ and issuers’ perspective.