ENVIRONMENTAL COST ACCOUNTING REPORTING

AT THE PLYWOOD PROCESSING FACTORY

(STUDY ON CV BARUNA JATI, MOJOKERTO REGENCY)

Mohamad Ma’ruf, Maria Yovita R. Pandin

Abstract
This study aims to determine the application of Environmental Cost Accounting at
CV Baruna Jati, Mojokerto Regency which functions to identify, measure, present,
and disclose existing environmental costs in the company. The design of this research
is descriptive qualitative research. Sources of this research data using primary and
secondary data. The results of the study show that the company has spent costs
related to environmental quality as a way to prevent environmental damage from the
impact of the production process, but these costs have not been specifically identified
such as theory Hassen and Mowen's. The company analyzes and measures
environmental costs using predetermined monetary units and a number of costs
incurred. The company recognizes that environmental costs are costs if they have
benefited from activities that have an impact on environmental quality.
Environmental costs are displayed simultaneously with accounts related to the
production process, namely the cost of goods sold and general and administrative
expenses which are recorded in the company's income statement and disclosed in the
notes to the financial statements.
Keywords: Environmental Accounting, Environmental Costs, Application of
Environmental Accounting.

Abstrak
Penelitian ini bertujuan untuk mengetahui penerapan Akuntansi Biaya Lingkungan
pada CV Baruna Jati Kabupaten Mojokerto yang berfungsi untuk mengidentifikasi,
mengukur, menyajikan, dan mengungkapkan Biaya Lingkungan yang ada pada
perusahaan. Desain penelitian ini adalah penelitian deskriptif kualitatif. Sumber data
penelitian menggunakan data primer dan sekunder. Hasil dari penelitian
memperlihatkan bahwa perusahaan sudah melakukan pngeluaran biaya- biaya yang
terkait dengan kualitas lingkungan hidup sebagai cara untuk pencegahan kerusakan
lingkungan dampak proses produksi tetapi biaya-biaya tersebut belum teridentifikasi
secara khusus seperti teori Hassen dan Mowen. Perusahaan menganalisi dan
mengukur biaya lingkungan dengan menggunakan satuan moneter yang telah
ditetapkan sebelumnya dan sejumlah biaya yang dikeluarkan. Perusahaan
memberikan pengakuan bahwa biaya lingkungan sebagai biaya apabila telah
mendapat manfaat dari aktivitas yang berdampak pada kualitas lingkungan. Biaya
lingkungan ditampilkan simultan dengan rekening yang terkait dengan proses
produksi yaitu beban pokok penjualan dan beban administrasi dan umum yang
tercatat dalam laporan laba rugi perusahaan dan diungkapkan dalam catatan atas
laporan keuangan.
Kata kunci: Akuntansi Lingkungan, Biaya Lingkungan, Penerapan Akuntansi
Lingkungan.

Introduction
 Pollution and production waste is one example of the negative impact
of industrial operational processes. Industries or factories need an
environmental accounting system as a form of corporate responsibility
control. Environmental accounting functions to identify, assess, measure, and
present waste management costs from operational activities as a way of
disclosing environmental quality in optimizing corporate social responsibility
(1). Environmental problems are a big problem and have a high urgency.
Environmental health cannot be denied and it is denied that it has been
damaged (2). In this case, humans have become the dominant contributor to
environmental damage and problems that have occurred, for example the
company's activities. As a form of protection, the State, in this case the
Government, has issued a law that regulates the Company's Obligations to
carry out Corporate Social Responsibility.
Given the increasingly massive negative effects that can be caused by
companies, the community demands that these negative impacts be
controlled. Controlling the negative impact of the company's operational
activities is inseparable from the theory of legitimacy. The theory of
legitimacy states that the organization will continuously and dynamically
operate in accordance with the boundaries and values that can be accepted by
the community around the company in an effort to gain legitimacy.
To get recognition, companies have incentives to carry out social
activities desired by the community. Failure to gain recognition from the
public can lead to a decline in public support. Disclosure of companies based
on annual financial statements is an effort to communicate social activities
that have been carried out by companies to get recognition from the
community so that the company's survival can be guaranteed (3) .
Environmental accounting disclosures currently do not have the right
standards and rules in PSAK (4), which means that companies are required to
take their own initiative and be independent in reporting environmental
information. Accounting plays a role in environmental conservation efforts,
in the form of voluntary disclosure in financial statements related to
Environmental Costs. Environmental Accounting functions to identify,
measure, compare, acknowledge, approve, and show environmental costs
incurred with the aim of managing the environment. The lack of standards
for making environmental accounting reports makes various corporate
entities have different criteria and reporting standards in allocating their
environmental costs, so this is very unique to study, especially for industries
that have high levels of pollution. This has been proven from several studies
that have been done previously with different research objects. In this case,
the role of accounting is very important as a communication tool not only to
internal parties of the company but also to external parties such as the
community around the company.

Literacy Study
Environmental Cost
Environmental costs are costs incurred as a result of degraded environmental
quality as a result of a company's operating activities. Environmental costs
must be presented separately from financial reports, meaning that companies
must make environmental cost reports specifically to provide relevant and
appropriate information for the company and external parties as a guide in
making decisions on existing environmental impacts. Environmental costs are
divided into several groups into (5): Environmental prevention costs,
Environmental detection costs, Internal environmental failure costs,
Environmental external failure costs.
Environmental Cost Accounting
Environmental Cost Accounting is a planned cost accounting strategy that
not only focuses on accounting for environmental maintenance costs, but
minimizes the environmental impacts that may occur. Environmental
accounting is the identification, measurement and allocation of
environmental costs and the integration of these costs into business decision
making and communicating the results to company stakeholders (6)
Stages of Environmental Cost Accounting Treatment.
The important role of environmental accounting requires an understanding of
parties or institutions that take advantage of the benefits of the environment
to maintain the stability of life. So to increase environmental conservation
efforts, entities need to budget for environmental costs in financial statements
and corporate responsibility (7). Therefore, in the process of allocating
environmental costs, it is necessary to plan the allocation stages so that they
are systematically arranged and presented correctly and appropriately. The
following are the stages of environmental cost allocation: 1) Identification, 2)
Measurement, 3) Recognition, 4) Presentation, and 5) Disclosure.
Research Methods
The research design used in this research is a qualitative research with
a descriptive research design. Qualitative research is more focused on
reviewing a phenomenon and problem as a whole through words and not
describing the phenomenon through numbers. Qualitative methods are used
to obtain in-depth data, a data that contains meaning or actual data (8).
This research was conducted at CV Baruna Jati, Mojokerto Regency.
Researchers chose to conduct research at CV Baruna Jati, Mojokerto Regency
because researchers assume that production activities that have been carried
out by the factory have a very significant impact on environmental
sustainability because of the potential for waste and pollution that can be
provided by the company. The techniques used in data collection are
observation, interviews and documentation.
This research uses descriptive qualitative analysis method, so the data
analysis of this research refers to the activity model of collecting data,
analyzing data, conformity of data with generally accepted regulations or
SAK, and drawing conclusions. Data analysis is carried out so that the
objectives of the research can be achieved and obtain the expected
conclusions. In this study, the data analysis carried out were:
a. Identification of detailed environmental costs recognized and issued
by CV Baruna Jati, Mojokerto Regency
b. The grouping of each item of environmental responsibility costs
recognized and reported by CV Baruna Jati, Mojokerto Regency
according to the cost of the type of waste
c. Data analysis on the recognition, measurement, presentation and
disclosure of environmental cost accounting in CV Baruna Jati,
Mojokerto Regency
After the data analysis is completed, the next step is to present the
processed data, in this study the data presentation is carried out as follows:
a. The identification of environmental costs is in accordance with Hansen
and Mowen's theory regarding the classification of environmental costs,
namely environmental prevention costs, environmental detection costs,
internal failure costs, and external failure costs.
b. Comparing the measurement, recognition, presentation and disclosure
of environmental cost accounting at CV Baruna Jati, Mojokerto Regency and
its conformity with PSAK No. 1 year 2014.
After the data is presented, conclusions can be drawn. Drawing conclusions
are the results of the analysis that can be used to take action. In this study, the
conclusion is regarding the process of identifying, recognizing, measuring,
presenting, and disclosing the environmental cost accounting that is applied
and its compliance with SAK (4) and regulations.
Results and Discussion
a. Waste generated by CV Baruna Jati, Mojokerto Regency

Wood waste originating from the wood processing industry includes, among
others, damaged veneer sheets, log end or poor quality maintenance wood,
peel residues, log pieces, pieces of veneer sheets, sawdust, sanding powder,
sebetan, end pieces of sawn wood and leather. Since mid-2014, wood
processing factories have dynamically increased their wastewater treatment
plants (IPAL), so that until 2020 they have spent a special fee for WWTPs of
approximately Rp. 650,000,000. The current waste capacity is 850-1200m3 per
week, after going through chemical and biological processes it will be able to
reduce up to 85% of parameters.

b. Environmental Cost Identification

In managing this waste, there are costs that must be incurred by CV Baruna
Jati. Based on the results of the research conducted, the environmental costs
with the most nominal and the most varied are for the management of solid
and liquid waste. researchers conducted direct observations and compared
with secondary data obtained, namely cash disbursements data (related to the
environment), the results are as follows;
 Table 1
Waste Fee Type
No Sub Jenis biaya
1 Solid waste A. Solid waste incineration
B. Waste disposal transport
C. Overtime (factory cleaning)
D. Waste Recycling
E. Cleaning Materials and Cleaning Tools
2 Limbah cair A. Use of Chemicals
B. Wastewater testing
C. waste expert
D. Maintenance of WWTP machines
E. Depreciation of the WWTP machine
F. IPAL employee salaries
G. electricity, WWTP
H. miscellaneous chemicals
I. Cleanliness around the factory
3 Limbah uap/gas A. Use of chemicals
Source : Processed by researches from company reports (2021)
a. Measurement
CV Baruna Jati in carrying out the measurement of the value and amount of
costs incurred as an effort to control environmental quality using monetary
units of the costs incurred. As seen in the table below:
Table 2
Environmental Cost Measurement
No Account Name Measurement
Cost of goods sold
 A. Environment
 B. Wastewater testing
 C. Cleanliness around the factory
1  D. Solid waste incineration
 E. Cleaning materials and tools
 F. Solid waste transportation
 G. Chemical material  Historical Cost
 H. IPAL employee salary
Beban administrasi dan umum
 A. Environment
2  B. Factory cleaning overtime
 C. Waste expert
 D. Waste reprocessing
Source : Processed by researches from company reports (2021)
b. Confession
From this information, the researcher made direct observations
of the financial statement data of CV Baruna Jati, the results of the
search for financial statement records, as presented below:
Table 3
Company Accounting Policy Overview
CV Baruna Jati
NOTES TO FINANCIAL STATEMENTS
December 31, 2021
Operating expenses are expenses related to sales, general and
administrative activities in an effort to support operations. Operating
expenses are classified into selling expenses, general and administrative
expenses. Operating expenses incurred and still payable are recognized,
recorded and presented at the total amount of these expenses during the
current period. Some of the general and administrative expenses that have
an effect on sales can be allocated to selling expenses based on a certain
allocation or percentage that has been determined by the company's
management.
Source: Processed by CALK Researcher CV Baruna Jati (2021)
From the explanation of this data, it can be described for all
cost of goods sold and general and administrative expenses recorded
and recognized during the current period for the total expense. So that
all environmental costs have the same treatment in recognition
because CV Baruna Jati categorizes environmental costs as costs of
supporting production activities, so they are included in the sub-cost
of goods sold and general and administrative expenses.
c. Presentation
Presentation relates to ways of reporting elements or items in a
set of financial statements so that the elements or items are sufficiently
informative. CV Baruna Jati in presenting environmental costs into its
financial statements is presented together with accounts related to the
production process, namely the cost of goods sold and administrative
and general expenses.
In the financial statements, there are no cost accounts related
to environmental quality costs, but based on secondary data obtained
by researchers, namely evidence of cash disbursements, it can be seen
that there are many cash disbursements transactions related to
environmental quality and have a fairly large nominal each month.
Environmental costs recognized by CV Baruna Jati are presented in
the company's income statement and included in the cost of goods
sold account as well as general and administrative expenses. The
 following is the presentation of environmental costs on the income
statement of CV Baruna Jati.
CV Baruna Jati presents the costs incurred as a result of its
business activities into the company's income statement in 3 expense
accounts, namely, cost of goods sold, general and administrative
expenses, and other expenses. For costs related to environmental
quality, they are included in the cost of goods sold and administrative
and general expenses
d. Disclosure
Disclosure relates to the matter whether a company's financial
information or accounting policies are disclosed or not. Based on the
results of observations made by researchers and report
documentation, it can be seen that CV Baruna Jati has disclosed the
costs associated with environmental quality costs.
CV Baruna Jati has disclosed procedures regarding
environmental costs to the Notes to the Financial Statements
regarding the reporting of environmental costs to the financial
statements with the aim of providing information on a number of
transactions in the company as a disclosure of waste treatment
activities that have been carried out, which are currently ongoing or
will only be running so that they can be implemented. be a positive
value for the company.
 Table 4
Environmental Cost Disclosure
NOTES TO THE FINANCIAL STATEMENTS OF CV Baruna Jati
December 31, 2021
Environmental Costs at Cost of Goods Sold :
Environmental Cost:
 Wastewater Testing 13,756,000.00
 Cleanliness Around the factory 7,654,000.00
 Solid Waste Incineration 3,600,000.00
 Cleaning materials and tools 4,500,000.00
 Solid waste transport cost 5,300,000.00
 Chemical material 67,261,500.00
 IPAL employees salary 17,000,000.00
Amount 119,071,500.00
Environmental Costs on Administration and General Expenses:
Environmental Cost
 Factory cleaning overtime 9,742,010
 Waste expert fees 23,500,000
 Waste recycling 6,910,600
Amount 40,152,610
Total Environmental Fee : 159,224,110
Source: Processed by Researchers based on CALK CV Baruna Jati (2021)
From a clear and complete identification, information related to
environmental costs can be used as a tool to communicate environmental
responsibility carried out by CV Baruna Jati with the surrounding community
and also environmental policy makers.
 Table 5
Environmental Cost Report
Environmental Cost Report CV Baruna Jati
December 31, 2021
Environmental Type Totalh %
costs
Prevention costs Waste recycling costs 6,910,000 0,15
Total cost of prevention 6,910,000 0,15
Detection Fee Wastewater testing fee 13,756,000 0,23
Waste expert fee 23,500,000 0,27
Total detection fee 27,256,000 0,5
Internal Failure Solid waste burning costs. 3,600,000 0,03
Cost Waste disposal transport costs 5,300,000 0,05
Overtime costs (factory cleaning) 9,742,010 0,17
Cost of cleaning materials and cleaning 4,500,000 0,05
tools
IPAL employee salary costs 17,000,000 0,19
Chemical costs 67,261,500 0,98
Total internal failure cost 107,403,510 1,47
External Failure Cleaning costs around the factory 9,742,010 0,19
Fee
Number of external failures 9,742,010 0,19
Total environmental costs 151,311,520 2,31
Source: Processed by Researchers based on CALK CV Baruna Jati (2021)
Conclusion
Based on the results of data analysis and discussions that have been
carried out by researchers regarding the application and reporting of
environmental cost accounting at CV Baruna Jati, it can be concluded as
follows:
1. CV Baruna Jati has incurred costs related to environmental quality as
an effort to prevent environmental damage due to the CV Baruna Jati
production process, but these costs have not been specifically identified
by agencies such as the identification of Hassen and Mowen, because
CV Baruna Jati identifies environmental costs as costs associated with
the production process, in which environmental costs are included in
the cost of goods sold and general and administrative expenses.
2. CV Baruna Jati has not reported environmental costs with a separate
report, reporting is done by entering environmental costs into
production sub-costs and reporting them in the income statement. This
is not in accordance with the explanation of PSAK No. 1 paragraph 9.
From the results of the research that has been concluded above, the
researcher realizes that there are still many shortcomings and not
perfect, but the researcher tries to provide suggestions for companies
 as objects of research and also for further research, so that in the future
it will be even better, namely as follows:
1. For CV Baruna Jati, it should compile a report on environmental
costs separately from financial reports in general so as to provide
information for environmental quality control as an effort to
improve the quality of the environment around the company and
also provide relevant and balanced information for tactical
management decision making.
2. For further researchers, they can find specific allocation standards
that discuss environmental costs so that they can be compared
with real conditions and situations in the company and can also be
explained from the perspective of management accounting in
more detail and clearly.
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