Question

What is natural capital accounting? Name two income statement elements and explain how natural capital accounting might affect each element.

Answer 1

Natural cpaital accounting is a process of calculating total stocks and flows of natural resources and services in a given ecosystem or religion. Accounting for such goods may occur in physical or monetary terms.

Revenues and expenses are two element s of income statement.

Natural cpaital accounting affects expenses element as fees paid to local government for water treatment and waste disposal.

Revenues affected by natural capital accounting as reflecting income from natural resources such as timbers,ores ,fish etc but the point at which natural income amount is used up reduces the capacity of natural capital to contribute providing the same amount of natural income in the future.

This is how natural capital accounting affect each element.