Life cycle analysis based on the environmental costs are defined and recognized

[Abstract] Based on the life cycle environmental costs and the introduction of the use of life cycle thinking and recognized the environmental costs are defined meaning, analyzed from the perspective of the life cycle environmental costs of the classification and life cycle environmental costs confirmation.

[Keywords:] Life cycle analysis; environmental costs are defined; environmental costs that are

For enterprises, environmental costs and other costs are equally important. At present, corporate environmental cost accounting and cost accounting management mainly using the traditional method of production is only applicable to specific types of enterprises, and most focus on the products to be accounted for the manufacturing phase, which to some extent, resulting in product cost untrue. Based on the product life cycle analysis, focuses on how to use this kind of thinking on the environment to define and confirm the cost.


First, the environmental costs and an overview of the life cycle analysis

(A) of the environmental costs
The definition of environmental costs, the current number of more authoritative when international accounting and reporting standards for the United Nations Intergovernmental Working Group of Experts (ISAR) in 11-13 February 1998 At its 15th meeting, adopted the <"Environmental costs and liabilities accounting and financial reporting>> defined, the environmental cost is "in accordance with the principles of environmentally responsible, for the management of the enterprise impact on the environment taken the measures taken or required costs, and business executives environmental objectives and requirements to pay the other costs. "This definition is standing on the angle of the micro enterprises to explain the environmental cost, is a narrow internal environmental costs.

In fact, the environmental cost itself is a comprehensive, can be defined from the concept of multiple perspectives. Both broad and narrow angle, the role of environmental costs can also be the object from the perspective of the analysis, but also from the environment occurs to demonstrate the main point of the cost. in this not them here. but no doubt is that the cost of business and regulatory environment defined the main purpose is to provide decision-useful information users, information, to the maximum extent possible to achieve business efficiency and social win-win benefits.

(B) Life cycle analysis
Product life cycle, is a product from birth to the whole process of the final out of the market, different products may not be exactly the same life cycle, but usually include product design and Development, production, sales, use and disposal of five stages.

Life cycle analysis is a clean production from the perspective used to evaluate the products throughout their life cycle, the impact of technology on the environment and methods. According to the definition of the International Organization for Standardization, "Life cycle analysis is a product system the life cycle of the input, output and comprehensive evaluation of potential environmental impacts, "is through the various stages of product life cycle environmental impact analysis, which assessed the environmental image of the product.

Life cycle analysis will be applied to the environmental cost management, that is, the product design stage, emphasizing the prevention of environmental impact; in the production phase of the clean production, and efforts to reduce the environmental load; in product use and retirement stages, through the resources recovery, recycling and safe disposal, recycling of resources to achieve. With the life cycle analysis can clarify the product at all stages throughout the life cycle impact on the environment influence the nature and size, to discover and identify pollution prevention opportunities. As the product life cycle environmental costs that may occur are considered, this approach overcomes the traditional cost management mode, consider only the production process defects, can increase the products are environmentally friendly features to further enhance the market competitiveness, but also make the product cost information is more accurate and complete accounting for and disclosure of environmental costs and more reliable.


Second, the use of life cycle analysis for environmental costs are defined and recognized the significance of

(A) strengthen the environmental costs are defined and recognized the need for
In the current situation of Economic Development, environmental pollution and environmental problems brought about by the tremendous negative impact has been apparent in many places, as the cornerstone of Economic Development, the enterprise is bound to the environmental pollution control and prevention assume corresponding social responsibilities. Therefore, companies must in fact have occurred or will occur to enhance the environmental cost analysis and management, and environmental costs of the definition and recognition are the first issues to be addressed.

1. Contribute to the harmonious Development of enterprise and environment
1992 United Nations Conference on Environment and Development adopted by the <<Agenda 21>>, the clean production enterprises as a key factor in sustainable development, industrial development in the world of international trend, companies need a proactive approach in dealing with the environment and solve the possible environmental crisis.

Environmental costs of enterprise management to make the right decisions must consider the relevant costs, and other costs, like environmental cost is the value of the material flowing through the performance of enterprises, in order to meet the costs of environmental standards into corporate profits will have a certain impact. Therefore, a reasonable definition and recognition of environmental costs, will be harmony with the environment for enterprise development to provide strong support for scientific decision-making.

2. Helps to improve the modern enterprise system
Enterprises as market entities, in pursuit of maximizing their own interests, often ignoring the interests of society, the modern enterprise system by the production company to production and operation of community-based transformation, requiring enterprises to pursue their own maximum benefit requirements of sustainable development and social unity. scientific and rational definition of environmental costs contribute to the strengthening of environmental costs and confirm the analysis and control, on the one hand, allows businesses to consider the perspective of standing on its own environmental problems, reduce resource consumption, reduce environmental pollution, to a certain extent, reduce product cost, increased corporate profits and enhance competitiveness, thus contributing to the establishment of modern enterprise system and improvement; the other hand, the effective use of resources and protection of the environment, will promote the social and Economic sustainable development.

3. Contribute to a better compliance with environmental regulations and reduce environmental risks
As environmental issues increasingly seriously by the international community, countries are gradually increasing environmental regulations. In this context, senior management within the enterprise and the financial and accounting department heads who must be present, for the foreseeable potential give sufficient attention to environmental regulations and concerns have occurred, or the environmental costs to be incurred on the business development strategy and short and long term financial performance, and develop appropriate measures to avoid significant non-compliance costs and environmental risks.

(B) the use of life cycle analysis for environmental costs are defined and recognized the advantages of
Thought of the use of life-cycle environmental costs, not only will the cost of production included in the analysis phase of the scope also includes the product design and development, use and retirement stages of cost; not only from their own perspective on issues, but also took into account the user and the entire social factors, so the cost of its introduction into the environment definition and confirmation process, has the incomparable superiority of the traditional method.

1. Help enterprises complete control of the product cost structure, and reasonable pricing
In most cases, the pricing of their products will have a direct impact on business performance, but also affect the market behavior of competitors, thereby indirectly affect its own marketing strategy. The traditional pricing is usually based on cost plus profit Cheng, however, usually do not include the cost of traditional environmental costs, the cost is not complete, which developed largely out of the product price can not fully cover the cost of business. Therefore, the use of life cycle analysis, product life cycle all aspects of the environmental occurrence of clearly defined costs, recognition, to be taken into account in pricing by product producers and consumers share the burden, which for the correct calculation of product cost, and promote Economic development and enhance environmental protection, social responsibility are of great significance.

2. Helps enterprises to maintain long-term competitive advantage
Emphasis on product life cycle analysis, the cost of the enterprise's understanding of the value chain to expand into the upstream and downstream products, help to overcome short-term behavior of enterprises, encourage enterprises to undertake more social responsibilities, so as to maintain their vitality and advantages of social position, optimize its living environment. While the short term, social responsibility means expenditures incurred to reduce current profits, but long-term strategic considerations, and its benefits for the enterprises of the future will be immeasurable. Therefore, the use of life cycle analysis define and confirm the environmental costs can be cost management to a strategic level, to help companies maintain long-term competitive advantage.


Third, life-cycle analysis based on the definition of environmental costs

Different product life cycle will be different, for a particular product is concerned, the different stages of the life cycle environmental costs incurred will also present the different characteristics, therefore, defined in the use of environmental life-cycle cost analysis should be based on different life cycle stage targeted analysis. This point of view on domestic and international scholars, according to the environmental cost of the life cycle stages of re-defined.

(A) of the product planning and design development stage
The late 20th century, 80 countries in the world to meet global environmental strategy for industrial restructuring, the concept of green products came into being. Although so far there is no uniform green product definition, there is no strict industry standards for accuracy, but the From the consumer market, the current recognized green standards usually include: less use of resources in production or energy, do not pollute the environment; in the use of low energy consumption, does not produce environmental pollutants; can be recycled after use or security abandoned.

Links to Research Papers Download http://www.hi138.com Enterprises to produce the standard green products, must be the source of the product, the product planning and design development stage start, give full consideration to products in the production, use and disposal stages of the environmental requirements. This stage there are environmental costs occur : Design staff training costs for green design, green design process operating fees.

(B) manufacturing and production stage
At this stage should be clean production. Cleaner production, including conservation of raw materials and energy, eliminating toxic raw materials, and all emissions and wastes to leave the production process prior to the maximum extent possible to reduce their emissions and toxicity.

Environmental costs occur at this stage are: environmental protection facilities investment costs (such as filters, waste water treatment plant investment, operation, management and other related costs), resource recycling costs (such as water recycling, energy and waste heat utilization occurred in the second costs), use of alternative materials such as toxic chemicals, and equipment renewal process to adjust the expenditure, improve product durability and easy to deal with the disintegration degree of regeneration of the cost of monitoring and measuring environmental impact costs, the waste generated in the production process etc. for recycling and disposal costs incurred. In addition, environmental labeling certification costs are mostly in this stage. environmental certification mark is the enterprise market competition in international trade passes, China since 1993 certification, the certification costs including certification application fees, inspection fees, and product testing fees, certification and registration fees (including the certificate fee), annuities (including logo use fee) and so on.

(C) Sales and use phase
Occurs at this stage include the environmental costs of environmentally friendly packaging products in the circulation of expenditure, the use of processes such as waste disposal costs.

(D) product disposal stage
Product waste or residue after usually waste water, waste gas, waste residue, waste and other forms, to achieve environmental standards, the product must carry out the necessary treatment of waste before discharge, or for recycling. Therefore, the phase of the environmental costs mainly in the following areas: recycling project investment costs and operating expenses, non-use of waste disposal costs, fines do not meet environmental standards and other expenses. In addition, due to reasons of their own damage to the environment by Costs incurred can be included at this stage. mainly on land pollution, natural damage repair costs, environmental accidents or pollution of the damages and penalties, all kinds of sewage charges, environmental protection, litigation costs and fines and so on.

Shows, product life cycle stages of the activities have an impact on the environment. Only through further stages of the product can be found in product cost occurred unreasonable to seek to improve methods, reduce the total cost, enhance competitiveness.


Fourth, the life cycle analysis based on the recognition of environmental costs

International accounting and reporting standards for the United Nations Intergovernmental Working Group of Experts discussed the 15 th meeting by the <"Environmental accounting and reporting of the position announcement>> confirmation of the environmental costs of the provisions made more specific, first, to confirm the time: It should be in the first times to be confirmed during the identification. The second is confirmed by: the capitalization or expense. if they meet the asset recognition criteria, environmental costs should be capitalized on, and benefit in the current and subsequent amortization period; otherwise, should be costs are included in the income statement.

Confirmed that environmental costs are capitalized or expensed, based primarily on whether the occurrence of the cost of future Economic benefits that enable enterprises to increase, if not, should be expensed. Accordingly, the product life cycle stages of the environmental costs can be considered do the following confirmation:
(A) of the product planning and design development stage
Costs incurred at this stage although it may not produce direct economic benefits, but the incidence of these costs is to reduce or prevent the subsequent stages of product life cycle, the potential pollution to protect the future environment, so the cost for this phase of the capital confirmation.

(B) manufacturing and production stage
1. environmental protection facilities investment costs, the use of alternative materials such as toxic chemicals, and equipment renewal process to adjust the expenditure, improve product durability and degree of regeneration of the disintegration of the cost of treatment is easy, because assets can improve efficiency and prevent environmental pollution, should be equipment ready for use or when the cost occurs, be capitalized.

2. Resource recycling costs, the waste generated in the production process for recycling and disposal and other costs incurred, business activities are related with the current clean-up costs; environmental load is the cost of monitoring and measuring the cost of current environmental auditing. They will bring economic benefits in the future, or the occurrence of future economic benefits and not closely related enough, so should the cost of treatment, the income statement.

In addition, although the environmental label certification costs for enterprises that future economic benefits, but because of the amount of little importance in accordance with accounting principles also can be an expense, included in the certified profit and loss.

(C) Sales and use phase
Circulation of products in environmentally friendly packaging expenses, if the packaging can be recycled, in line with asset recognition criteria, it can be be capitalized, or should be expensed. Product generated in the process of waste disposal costs, usually with the use of current related, may occur when the cost of processing fees.

(D) product disposal stage
Recycling project investment costs, waste gas treatment facilities to increase investment spending because the production capacity and efficiency of assets and therefore should be capitalized when the costs are incurred. Recycling project cost of routine maintenance operations, non-use of waste disposal costs, environmental damage repair costs, environmental incidents or hazards of damages and penalties, all kinds of sewage charges, environmental protection, litigation costs and fines are usually the cost of treatment.

This definition of environmental costs and confirmed that the center is the company's products, according to the analysis of life cycle thinking. But the environmental issue is a major event the whole society, the strength of individual enterprises is weak. Therefore, all enterprises, especially the same value chain, synergies should play all kinds of enterprises, from the perspective of society as a whole, the use of scientific methods to define and confirm the environmental costs, the establishment of sharing mechanism to solve environmental problems and effective reverse recovery system, to achieve economic, social, harmonious development of the environment.


[References]
[1] Translated by Liu Gang, Chen Yugui school. United Nations International accounting and reporting standards - environmental costs and liabilities of the accounting and financial reporting [M]. Beijing: China Financial and Economic Publishing House ,2003:11-12.

[2] Zheng Ying, Zhang. Based on life cycle analysis of the environmental cost management model [J]. Jiangsu business on, 2006 (5) :121-122.

[3] Jia-Lin Xu, Meng Lee. Environmental accounting [M]. Shanghai: Shanghai Finance University Press ,2004:319-320.

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