Theoretical Framework for Environmental Accounting- Application on the Egyptian Petroleum Sector

In the last two decades there has been an increasing demand on economic and financial data about environment and natural resources. Environmental Accounting plays an important role in providing the needed data on environment to different users at all levels for various reasons. The focus of traditional (conventional) accounting profession (and practices) is on the economic aspects only. That is, emphasis is on man-made assets. though taking into consideration the environmental dimensions especially natural resources/assets of great importance. Within this context, the traditional accounting practices can be termed as man-made asset accounting while the more recent trends in accounting practices can be termed as natural asset accounting. This paper aims to set the conceptual framework for environmental accounting (Environmental, Ecological, Natural resource, green accounting) at all levels for different purposes. In addition, different concepts and terminology associated with Environmental Accounting is also discussed. As well as, a clarification of why to have an environmental accounting. Besides, introducing a system for environmental accounting at Meso (sectorial) level with application on the Egyptian petroleum sector. This paper suggest introducing an adjusted balance sheet and profit and loss account –as a Satellite Accounts – where a number of environmental issued to be evaluated and included: • Petroleum reserve. • Soil and marine (Exploration acreages). • Health Environmental Liabilities. • Emissions trading. Lastly concluding remarks and recommendations as the researcher believes that there is a room introduce a system of environmental accounting in petroleum sector. No doubt that the suggested system will help filling the existing gaps.