Financial Reporting Standards and Cost of Waters in Corporate Organization

Abstract

This paper examined costs of waters and its disclosures propensity in financial statement of corporate organizations with a view to advocate for a suitable reporting standards globally. International Accounting Standard Board has not specifically announced or produced any financial reporting standard in support of reporting cost of waters despite the huge amount of monies that some corporate industries incurred on it. Both primary and secondary data were sourced from six breweries that uses water as one of their major raw materials and analyzed through descriptive statistics techniques of Analysis of Variance (ANOVA) and Simple Percentage Method (SPM). The result revealed that there were significant relationship between earnings and cost incurred on waters by some specialized industries like breweries, juice manufacturers and food processing companies in Nigeria and as such affects the earning potentials of the organization. On the average, water cost showed p-value of (0.04) > (0.05) level of significant in and p-value of (0.18) > (0.05) level of significant when reported differently from environmental costs. The result obtained from (80.1%) of the corporate affair section of six breweries and 65.7% professional accountants judgement from selected districts of the Institute of Chartered Accountants in Nigeria showed that there are urgent needs to provide for a separate standard of reporting such cost especially for specialized industries that uses water as their major input/raw material in their production. The study concludes that reporting cost of waters separately will project the principles of IFRS as prescribed by the board. Thus, the basic principles of human rights, cost standardization, environmental pollution protection and treatment-costs could be accounted for and reported in all the continent of the world. Based on this, the study recommends that accounting standards making bodies need to give cost of waters adequate consideration with allotment of appropriate standards for disclosure and reporting of costs of waters for all corporate organization world-wide to allign uniformity in financial reporting.