How Does the Accounting Treatment of the Environment Transaction and How it Impacts to Company's Performance? Case from Indonesia

Einde Evana,Lindrianasari Lindrianasari,R Weddie Andriyanto

doi:10.28992/ijsam.v3i1.71

Abstract

This study aims to investigate the awareness of big companies in Indonesia on the allocation of environmental costs. This research is very important to do, given that the company's operational effects as contributing very large carbon emissions (especially companies whose activities are in contact with nature). The method used in this research is observation, by tracing the existence of environmental cost in every big company in Indonesia, which is in database Bloomberg. The number of samples of this study is 2,043, for all companies in the period of observation 2004–2017. The results of this study indicate a relatively slow response of companies in responding to regulations issued by the state. This also indicates the low compliance of large companies in Indonesia for the implementation of the rules, in terms of accounting known as the recognition and measurement of accounting for environmental transactions.

Highlights

The negative impact of environmental degradation has awakened the global community on the importance of environmental and social management
An important environmental discussion continues on a global level has recorded some valuable activities such as, Conferences of the Parties–COP; Kyoto Protocol (1997 concludes and establishes legally binding obligations for developed countries to reduce their greenhouse gas emissions in the period 2008–2012); Cancún Agreement (2010, states that global warming in the future should be limited depending on the type of industry); Paris Agreement (2015 in COP 12, which regulates emission reductions through joint commitments of the world's nations–including Indonesia, which came into force on 4 November 2016)
The level of disclosure of environmental information and CSR looks better than the environmental cost reporting

Summary

Introduction

The negative impact of environmental degradation has awakened the global community on the importance of environmental and social management. The Conference on Environment and Development held at the Earth Summit on 3–14 June 1992 in Rio de Janeiro, Brazil, attended by 35,000 participants consisting of heads of state, researchers, NGOs, journalists, academics and other concerned parties as a representative of 172 countries, became an important momentum for the issue of save the world. An important environmental discussion continues on a global level has recorded some valuable activities such as, Conferences of the Parties–COP (annual conference started in 1995 to assess progress on climate change); Kyoto Protocol (1997 concludes and establishes legally binding obligations for developed countries to reduce their greenhouse gas emissions in the period 2008–2012); Cancún Agreement (2010, states that global warming in the future should be limited depending on the type of industry); Paris Agreement (2015 in COP 12, which regulates emission reductions through joint commitments of the world's nations–including Indonesia, which came into force on 4 November 2016)

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Results

Conclusion