Accounting for Water: A Global Comparison
Kelly ConwayEV 302
May 6th, 2015
Agenda
● Australia● England● United States● My Recommendation
Australia● Started in 2004 with National Water Initiative● Water Act 2007
o The Bureau of Meteorology Australian Water Accounting Standard
● National Accounting Standards Board● Auditing and Assurance Standard Board
National Water Initiative● Blueprint for water reform● Generalized plan
o “achieve a more cohesive national approach to the way Australia manages, measures, plans for, prices and trades water”
● Created National Water Commission
Water Act 2007● Assigned responsibilities to the Bureau of
Meteorology ● 4 core responsibilities
o Ensure availability of water info (public & stakeholders)
o Provide regular status updates of water usageo Offer future forecast of water availabilityo Compile/maintain water accounts
Australian Water Accounting Standard● 2 approved standards:
o AWAS 1 & AWAS 2● Both adhere to the Water Accounting
Conceptual Frameworko accrual basis of accountingo clear definitions of water accounts (water
assets/liabilities)o necessary qualitative characteristics
AWAS 1 & AWAS 2● AWAS 1
o preparation and presentation of water financial statements
o Statement of Water Assets and Water Liabilitieso Statement of Water Flows
● AWAS 2o requirements for assurance engagementso assumed responsibilities of lead practitionero stresses confidentiality, communication and
documentation
National Accounting Standards Board● Established in 2009● Independent advisory board● Provides professional advice on development and
application of water accounting standards● Composed of cross-disciplinary fields of water
o academiao environmentalo governmental
Auditing and Assurance Standard Board
England● Beginning stages of creating water accounting system● Developed affiliations with advisory boards to assist in
planning and designing systemo ICAEWo Natural Capital Coalitiono United Nations
SEEA - Water● Future forecasts
Institute of Chartered Accountants in England & Wales (ICAEW)● Mission: to advance the profession of accountancy
through education, professional standards and innovative developments
● Water Initiativeso recognize problemo offer solutions/case studieso do not offer definitive answers, merely advice &
possibilities to consider
Natural Capital Coalition● Mission: achieve a shift in corporate behavior to
conserve and enhance rather than deplete natural capital
● Comprised of businesses, practitioners, policy-making bodies, etc.
● Need for common approach to accounting for natural resources
● Natural Capital Protocol
Natural Capital Protocol● aims to create a standardized, uniform system for
businesses to measure and value their direct and indirect impacts on natural capital
● first step in developing future generally-accepted principles of accounting
● act as a tool for companies to:o improve decision makingo decrease riskso identify new opportunities
United Nations - SEEA Water● System of Environmental-Economic Accounting for
Water o agreed upon concepts, definitions, tables, accountso standardizing valuation methods in water accounting
various techniques no standardized ways because economies differ
o focuses on both economic/environmental impact on water
Future Forecasts● “plan for the plan”● Valuable information to source from● Continue to research and develop ideas● More detailed/focused on its approach● Start implementing in the next few years
United States● No national reporting/valuation standards● State vs. State
o Regulatory boardso Valuation methods
● Municipalities
State vs. State● Various water companies both public/private
o Aquarion (CT, MA, ME)o American Water (PA, NY,)
● Rates determined by region, meter size, usage, OH, etc.
● Report to different regulatory boards:o Public Utilities Regulatory Authority (CT) o Pennsylvania Public Utility Commission (PA)
Aquarion
Pennsylvania American Water
MunicipalitiesMetropolitan District Company
● non-profit municipal organization● governed by 29 board, residents of towns
comprising the district● report to committees/bureaus
o Municipal Securities Rulemaking Board
Metropolitan District Company
Challenges FacedBy lacking national standards for water accounting:
● Limited consistency● Difficult to compare prices/regulations
municipalitie vs. state, state vs. state location/region
● Fluctuations in water quality & assessment
My RecommendationsNeed for water accounting system● Current/water issues● Financial perspective● Unified system promotes reliability and acts as guideline
o Reporting standardso Boards/Commissions
● Cost-benefit analysiso comparability increaseso consistency increases
