Activity-Based Cost & GHG Accounting: Conceptualization, Design and Implementation

Abstract

The Greenhouse Gas (GHG) Protocol initiative established an activity-based standard for accounting and management of GHG emissions that is used by regulators all over the world for setting up climate-change legislations. In the ‘Activity-Based Cost & GHG Accounting’ the GHG Protocol’s accounting metrics are integrated with the cost accounting metrics that underly the flexible standard-cost accounting. In the ‘Activity-Based Life-Cycle Accounting’ the GHG Protocol’s accounting metrics and corresponding informational and computational requirements are defined and aligned within an ERP-Control information system. The alignment with the ERP-control system gives the providers of such systems precise guidance for integrating the activity-based GHG accounting system into their existing cost accounting systems. On the other hand, the alignment also allows the implementation of the integrated cost & GHG accounting system as an add-on solution to any ERP-Control system. For being able to apply the integrated system in the generic context of a multi-level product structure and a multi-level production structure, i.e. the multi-level ‘Bill-of-Material’ (BOM) and the multi-level ‘Routing’ an adequate integration of the two multi-level structures is needed. Solving this ‘multi-level integration problem’ for ensuring the system’s generic applicability is this paper’s primary research objective.