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Integrating Environmental Costs Into Asset Life Cycle Costing and Acquisition Strategy

Wiston Mbhazima ()
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Wiston Mbhazima: University of Limpopo

The Journal of Accounting and Management, 2021, issue 1(11), 74-82

Abstract: The purpose of this paper is to illustrate how environmental costs should be integrated into the LCC as an asset costing and acquisition strategy for the firm and the importance thereof. This paper suggests the integration of environmental costs into life cycle costing (LCC) as an asset costing and acquisition strategy for the firm. This paper argues that effective LCC and life cycle assessment (LCA) are fundamental to the attainment of the firm’s long-term goals and enhances organisational performance. The method applied in this paper is a normative research approach, where the researcher has presented and illustrated the existing life cycle costing approach and illustrated further how environmental costs can be integrated to broaden the cost base to include environmental considerations. This paper intended to fill gap in the body of knowledge. Therefore, decision-makers, policy-makers and academicians could find this content of this paper valuable. This paper presents a Life Cycle Cost Assessment Framework. The importance of this integration is also highlighted in the paper. In conclusion, the paper recommends that firms should administer and control their environmental issues and costs to improve performance.

Keywords: Life cycle costing; Environmental costs; Asset costing; Acquisition strategy; Firm performance (search for similar items in EconPapers)
Date: 2021
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Handle: RePEc:dug:jaccma:y:2021:i:1:p:74-82