Social Accounting :
Social Accounting /Social responsibility accounting aims to measure and inform the general public about the social welfare activities undertaken by an organization and its impact on the society.
Social Accounting is defined as a process of measurement and reporting of information concerning the impact of an entity and its activities on society
Objectives of Social Accounting :
To identify and measure the contribution of a firm towards the society.
To determine if the firm’s strategies are consistent with social priorities.
To make available, relevant information about the firm's goals, programmes,
performances, use of scare resources.
To Quantify and properly present the social costs and benefits of an enterprise.
Need / Benefits of Social Accounting :
It improves the image of the firm.
It helps in marketing through greater customer support.
It acts as an evidence of social commitment..
A firm fulfills it’s social obligations and informs its members ,the govt. and the general public to enable everybody to form a correct opinion.
It counters the adverse publicity or criticism by hostile media.
Social Accounting Procedures/Approaches/techniques :
Classical Approach : - Introduced by Milton friedman – There is one and only one social responsibility of business to use its resources and engage in activities designed to increase its profits , as long as it stays within the rules of the game .Engage in free and open competition without deception or fraud.
Descriptive Approach :- Social Activities of a business are presented alongwith financial statements in a narrative form .
Integral Welfare Theoretical Approach :- This approach advocates the preparation of a social report comprising social benefits and social costs.
Social Indicator (Brummet Approach) :-This approach involves different areas of social contribution to be undertaken by the business.
Total Performance = Net Income + Human resource Contribution
+ Public Contribution
+ Environmental Contribution
+ Product/Service Contribution
Linowes Operating Statement Approach :- (D.F.Linowes ) advocates preparation of a SEOS (Socio Economic Operating Statement). It includes tabulation of Firm’s expenditures for social benefits and estimated social costs of various programs and hence calculating the Social Contribution = Social Benefits – Social Costs.
Social Income Statement and Social Balance Sheet :-It emphasizes on quantifying the values contributed to the society and detriments caused to the society and presenting them in a fashion similar to the typical financial Balance Sheet and Income Statement.
Oil India Limited
Social Income Statement
2002-03 2001-02
I) Social Benefits & Costs to Staffs
A) Social Benefit to staff
1) Housing Facilities
2) Transport
3) Holiday Benefits
4) Provident fund & Pension
Total
B)Social Cost to staff
Net Social Benefit to staff ( A- B)
II) Social Benefits & Costs to Community
A) Social benefits to Community
1) Local Taxes Paid
2) Environment Improvement
3) Social Welfare of community
Total
B) Social Cost to community
Net Social Benefit ( A- B)
III) Social benefits &Cost to General Public
A) Social benefits to General Public
1) Tax paid to central govt.
2) Tax paid to state govt.
3) Other social benefits
Total
B) Social cost to general public
Net Social Benefits ( A-B)
Net social Income( I+ II+III)]
Social Balance Sheet
Liabilities Amount Assets Amount
Organization Equity ……… 1) Social Capital
Investment ………..
Social Equity: a) Building ………..
Contribution by staff b) Equipment ………..
c) Water &
Gas Supply ………..
II) Human Assets …………
Social accounting in India:-
Social Accounting concept is relatively new in India. Although it is very difficult to identify various social cost and benefit to the society and still more difficult to convert these cost to monetary equivalents. The UNIDO and COECD have published the methodology for measuring social costs and benefits . Yet, in India, very few business corporation are following the social accounting concept. Tata Iron and Steel Corporation ( TISCO) was the first concern of India which conducted social accounting with a sole aim to examine and report to what extent the company has been able to fulfil the social responsibility to shareholder, the society, and the local community.
Some of the other undertaking also started social accounting include NTPC , Cement corporation of India, ONGC, Bharat Heavy Electricals Limited, IDPL, Coal India Limited.
Social Accounting /Social responsibility accounting aims to measure and inform the general public about the social welfare activities undertaken by an organization and its impact on the society.
Social Accounting is defined as a process of measurement and reporting of information concerning the impact of an entity and its activities on society
Objectives of Social Accounting :
To identify and measure the contribution of a firm towards the society.
To determine if the firm’s strategies are consistent with social priorities.
To make available, relevant information about the firm's goals, programmes,
performances, use of scare resources.
To Quantify and properly present the social costs and benefits of an enterprise.
Need / Benefits of Social Accounting :
It improves the image of the firm.
It helps in marketing through greater customer support.
It acts as an evidence of social commitment..
A firm fulfills it’s social obligations and informs its members ,the govt. and the general public to enable everybody to form a correct opinion.
It counters the adverse publicity or criticism by hostile media.
Social Accounting Procedures/Approaches/techniques :
Classical Approach : - Introduced by Milton friedman – There is one and only one social responsibility of business to use its resources and engage in activities designed to increase its profits , as long as it stays within the rules of the game .Engage in free and open competition without deception or fraud.
Descriptive Approach :- Social Activities of a business are presented alongwith financial statements in a narrative form .
Integral Welfare Theoretical Approach :- This approach advocates the preparation of a social report comprising social benefits and social costs.
Social Indicator (Brummet Approach) :-This approach involves different areas of social contribution to be undertaken by the business.
Total Performance = Net Income + Human resource Contribution
+ Public Contribution
+ Environmental Contribution
+ Product/Service Contribution
Linowes Operating Statement Approach :- (D.F.Linowes ) advocates preparation of a SEOS (Socio Economic Operating Statement). It includes tabulation of Firm’s expenditures for social benefits and estimated social costs of various programs and hence calculating the Social Contribution = Social Benefits – Social Costs.
Social Income Statement and Social Balance Sheet :-It emphasizes on quantifying the values contributed to the society and detriments caused to the society and presenting them in a fashion similar to the typical financial Balance Sheet and Income Statement.
Oil India Limited
Social Income Statement
2002-03 2001-02
I) Social Benefits & Costs to Staffs
A) Social Benefit to staff
1) Housing Facilities
2) Transport
3) Holiday Benefits
4) Provident fund & Pension
Total
B)Social Cost to staff
Net Social Benefit to staff ( A- B)
II) Social Benefits & Costs to Community
A) Social benefits to Community
1) Local Taxes Paid
2) Environment Improvement
3) Social Welfare of community
Total
B) Social Cost to community
Net Social Benefit ( A- B)
III) Social benefits &Cost to General Public
A) Social benefits to General Public
1) Tax paid to central govt.
2) Tax paid to state govt.
3) Other social benefits
Total
B) Social cost to general public
Net Social Benefits ( A-B)
Net social Income( I+ II+III)]
Social Balance Sheet
Liabilities Amount Assets Amount
Organization Equity ……… 1) Social Capital
Investment ………..
Social Equity: a) Building ………..
Contribution by staff b) Equipment ………..
c) Water &
Gas Supply ………..
II) Human Assets …………
Social accounting in India:-
Social Accounting concept is relatively new in India. Although it is very difficult to identify various social cost and benefit to the society and still more difficult to convert these cost to monetary equivalents. The UNIDO and COECD have published the methodology for measuring social costs and benefits . Yet, in India, very few business corporation are following the social accounting concept. Tata Iron and Steel Corporation ( TISCO) was the first concern of India which conducted social accounting with a sole aim to examine and report to what extent the company has been able to fulfil the social responsibility to shareholder, the society, and the local community.
Some of the other undertaking also started social accounting include NTPC , Cement corporation of India, ONGC, Bharat Heavy Electricals Limited, IDPL, Coal India Limited.
Student of Rai Business School-New Delhi
Sanjeev Kumar Singh
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