Optimizing Eco-Efficiency Implementation of Environmental

Optimizing Eco-Efficiency: Implementation of Environmental Management Accounting According to Rudianto (2012), Accounting is an information system that produces financial information to interested parties regarding the economic activities and conditions of a company. The results of accounting are called financial statements. Theinformation generated from the accounting process must be able to answer the general needs of the users. Therefore, the financial statements of a business entity must have the quality required by various parties who need this financial information. According to Rahardjo (2007), the meaning of accounting itself has changed from the understanding of a few decades ago, where "accountants" were called "bookkeepers" because their function was to record every financial transaction that occurred into books called Journals and Ledgers. This list of all the company's financial transactions is the basis for calculating whether the company makes a profit or suffers a loss. The environment based on Law No. 32 of 2009 concerning Environmental Protection and Management in Article 1 number 1 is : "The unity of space with all objects, forces, conditions and living things, including humans and their behavior that affect the continuity of life and the welfare of humans and other living things." According to Ikhsan (2009), environmental accounting is a broad term used in different contexts, such as: (1) assessment and disclosure of environmental related financial information in the context of financial accounting and reporting, (2) assessment and use of environmental related physical and financial information in the context of environmental management accounting, (3) estimation of external environmental impacts and costs which often refers to Full Cost Accounting (FCA). Environmental Costs According to Ikhsan (2009), environmental costs are basically related to the cost of products, processes, systems or facilities important for better management decision making. The purpose of costing is how to reduce environmental costs, increase revenues and improve environmental performance by paying attention to the current situation, the futureand potential management costs. Therefore, how a company describes environmental costs depends on how it intends to use the information (in this case cost allocation, budgeting, design/product processes, other management decisions) and the scale or scope of the exercise. According to Hansen and Mowen (2009), environmental costs are all sacrifices incurred by companies in order to maintain environmental stability. Environmental costs are basically related to the cost of products, processes, systems or facilities important for better management decision making. The purpose of cost acquisition is how to reduce environmental costs, increase revenue and improve environmental performance by paying attention to the current situation, the future and potential management costs. Environmental costs can be classified into four categories: 1. Environmental prevention costs, are costs for activities undertaken to prevent the production of waste or garbage that can damage the environment (Hansen and Mowen, 2009). 2. Environmental detection costs, are costs for activities undertaken to determine whether or not the company's products, processes, and other activities meet applicable environmental standards (Hansen and Mowen, 2009). 3. Environmental internal failure costs, are costs for activities that are carried out due to the production of waste and garbage, but are not discharged to the external environment (Hansen and Mowen, 2009). 6 4. Environmental external failure costs, are costs for activities that are carried out and release waste or garbage into the environment. This cost is divided into two: realized external failurecosts are costs experienced and paid by the company. Unrealized external failure costs or social costs are caused by the company, but experienced and paid by parties outside the company (Hansen and Mowen, 2009). Environmental Management Accounting The definition of environmental management accounting based on IFAC (International Federation of Accountants) (1998) and UNDSD (United Nations Division for Sustainable Development) (2001) is the management of environmental and financial performance through the implementation of appropriate accounting systems and practices by identifying, collecting, measuring, calculating, classifying and analyzing environmental information (physical and monetary) to support internal and external decision making. According to Berry and Rodineli (1999) there are five combinations of approaches that are carried out comprehensively related to environmental management accounting, namely: a. Reduce and prevention for waste, is the company's way of minimizing and preventing waste by effectively protecting the environment as a form of preventive activity against activities that can damage the environment. b. Demand side management, is an approach where the company leaves no product waste, sells according to the amount of consumer needs and makes consumers more efficient in using the product. c. Design for environment (DFE), is the design of the corporate environment that becomes an integral part of the pollution prevention process in the production process. d. Product stewardship, is a less polluting product alternative and alternative materials, energy sources, processing methods that reduce waste and become a necessity for the company. e. Full cost accounting, is a corporate environmental cost report that identifies and quantifies the environmental cost performance of a product.