Emerging accounting patterns: accounting for natural resources

This paper identifies the issues that need to be considered in the development of a suitable financial reporting framework for natural resources, starting from existing guidance at local, national and international level (for example GRAP, IPSAS, IFRS), given the paucity of research to date where natural resource reporting is concerned. The author explains which natural resources need to be reflected in financial statements (in terms of recognition and disclosure) and discusses valuation issues. This paper highlights that the lack of financial accounting standards for natural resources might indirectly contribute to their depletion and considers, inter alia, their impact on social and inter-generational equity.IMPACTThis paper highlights the lack of a financial reporting framework for the measurement and presentation of natural resources, which would contribute to better management of their sustainability. Academics and practitioners have been focusing on the extent to which natural resources should appear as assets in financial statements and whether the value of natural resources can be measured reliably. The author discusses different perspectives, including the potential impact on natural resources of their depletion, catastrophic natural events and the negative externalities of economic activities on the environment and society.