Theoretical Approach to the Application of Environmental Financial Accounting

Abstract

The awareness evolution of company’s economic players about the environmental issues, leads to changes in the companies and their stakeholder’s real behavior, this brings to adopt different actions protective of the environment. However, this new perspective has challenged the organizational model, the management system and the organization’s competition strategic vision. Otherwise, the implementation of these actions in the sustainable development context generates significant expenses which must be accounted for governance purposes. Nevertheless, the traditional accounting has proved incapable to register flows related to depollution and pollution prevention actions The intervention of accounting standard-setters is therefore required, such as IAS / IFRS standards. This has proved an ability to promote financial environmental accounting by determining concepts besides a modern vison of accounting information use, in order to help companies assess their environmental performance and inform investors about potential environmental risk.