CSR Accounting Guidelines: R-BEC007

Reitaku University Business Ethics & Compliance Research Center
R-BEC007
CSR Accounting Guidelines
Project: CSR Accounting Guidelines

Project Leader: Kazuhiro Bai
Published: December 27, 2007
Reitaku University Business Ethics & Compliance Research Center
Table of Contents
Table of Contents ............................................................................................. 1

About the Publishing of the Revised Edition ................................................5
R-BEC007 Project Member .......................................................................................... 10
I. What Is CSR Accounting..............................................................................11
(1) Purpose of CSR Accounting Guidelines..................................................................... 11
(2) Characteristics of CSR Accounting............................................................................12
(3) Fundamental Approach to CSR Accounting Guidelines ......................................... 13
1) Background of CSR Accounting Efforts ......................................................................... 13
2) Necessity of CSR Accounting and Merits of Implementation ................................... 15
3) CSR Accounting Addressed in These Guidelines .........................................................16
II. Meaning and Function of CSR Accounting .............................................18

(1) Definition of CSR Accounting .....................................................................................18
(2) Approach to CSR Accounting .....................................................................................18
(3) General Structure of CSR Accounting ......................................................................20
(4) Basic Function of CSR Accounting ........................................................................... 22
1) Reporting Function .......................................................................................................... 23
2) Management Function....................................................................................................24
III. Overview of CSR-Related Costs............................................................. 26

(1) CSR Accounting Positioning ...................................................................................... 26
(2) CSR-Related Costs ...................................................................................................... 26
1) Cost Categorization ......................................................................................................... 27
2) CSR-Related Cost Recording Standards ....................................................................... 29
3) “Shared Items” and “Individual Items” as Activity Indices ........................................ 30
(3) Designing an Internal CSR Accounting System .......................................................35
1) Basic Model of a CSR Accounting System .....................................................................35
2) Data Identification Framework ..................................................................................... 38
IV. Qualitative Characteristics of CSR Accounting Data .........................40

(1) General Requirements and Prerequisites of CSR Accounting ............................. 40
CSR Accounting Guidelines R-BEC007 Page 1

1) Principle Prerequisites ....................................................................................................42
2) Data Quality Principles...................................................................................................42
3) Data Reliability Principles .............................................................................................. 43
4) Principles Concerning the Ease of Information ......................................................... 44
(2) Vital and Fundamental Elements of CSR Accounting ............................................46
1) Applicable Period .............................................................................................................46
2) Scope of Tabulations.......................................................................................................46
3) Tabulation Categories .....................................................................................................47
V. CSR Accounting Calculation Form System............................................49

(1) CSR Activity Calculation Forms ................................................................................. 50
1) Environment-Related Activity Calculation Form.......................................................... 51
2) Labor and Human Rights-Related Activity Calculation Form ................................... 54
3) Product and Service Liability-Related Activity Calculation Form ............................ 57
(2) Income Statement-Inclusive Calculation Form.......................................................60
(3) Stakeholder-Specific Distribution Calculation Forms.............................................61
VI. Disclosure of CSR Accounting Data ......................................................64
(1) Information Included in CSR Accounting Disclosure .............................................64
1) Purpose of CSR Accounting............................................................................................64
2) Calculation Prerequisites ...............................................................................................64
3) Calculation Results .......................................................................................................... 65
4) Calculation Estimation Standards................................................................................. 65
5) Explanation of Calculation Results ............................................................................... 65
(2) Basic Format of CSR Accounting Calculation Form ...............................................66
1) CSR Activity Calculation Forms ..................................................................................... 67
2) Income Statement-Inclusive Calculation Form ...........................................................70
3) Stakeholder-Specific Calculation Form .........................................................................71
VII. The Process of Introducing and Operating Systems for CSR

Accounting ..................................................................................................... 72
(1) ECS2000 Framework as a Management System ..................................................... 72
(2) CSR Accounting System Introduction and Operation Process..............................75
1) Interlinking Data .............................................................................................................. 76

2) Data Tabulation ............................................................................................................... 78
3) Data Analysis and Evaluation..........................................................................................81
4) Data Disclosure ............................................................................................................... 82

Concerning free use of R-BEC007© and copyrights
In order to simplify free use of R-BEC007 by many companies, evaluation agencies,

and other organizations, R-BEC007 copyrights shall belong to the Business Ethics &
Compliance Research Center R-BEC007 project members and Kazuhiro Bai
(R-BEC007 project leader) is hereby named the representative of those rights.
Accordingly, commercial distribution of R-BEC007, or any altered its versions, as a

product without the permission of the copyrights holder is hereby forbidden. R-BEC007
was created in good faith by the project members based on the presumption that it
would be available to use for free. The copyrights to this document are hereby clarified
to ensure that these original intentions are not abused.

About the Publishing of the Revised Edition
“R-BEC0071 : CSR accounting guidelines” presented and proposed here are a

collection of basic concepts and accounting measurement, and disclosure models related
to CSR (Corporate Social Responsibility) accounting. These guidelines were created to
provide a way to quantitatively identify/measure and report on the state and condition of
CSR-related activities. Unique about these guidelines is that the focus is centered on
CSR, an issue recently gaining attention but until now had not been a part of corporate
evaluations. These guidelines categorize CSR efforts into the three categories of
economy, environment, and society, and use monetary gauges to quantify the results.
In July 2004, the Reitaku Business Ethics & Compliance Research Center published
R-BEC004 “CSR Accounting Guidelines R-BEC004” (hereafter “R-BEC004”) as an
accounting framework for the quantitative identification, measurement, and evaluation
of efforts and activities related to CSR. After the publication of R-BEC004, the
International Standards Organization (ISO) established international standards related to
CSR (the guidance document “ISO26000” is scheduled for release in 2009). This has
led to an increased focus on CSR and we now see an increasing number of companies
publishing CSR reports as CSR becomes a permanent presence in the corporate
environment. However, in contrast to above mentioned embracement of CSR, the fact
that fraud accounting and various other corporate scandals are constantly being brought
to light.
In consideration of these facts, the new Corporate Law and the Financial Products
Exchange Law outline the creation of internal control systems for companies for the
purpose of improving corporate governance structures and, further, to regain the
reliability of financial reports. From the perspective that improvement of corporate
organizational structures is absolutely necessary, the problem of internal control systems
and various problems facing CSR are not separate issues but, in fact, can be looked
upon as a single entity that may greatly help us know when it is time to evaluate the
state of corporate management.

The scale of business and scope of activities of today’s corporations continue to
expand dramatically. So much so that corporations today hold tremendous influence
over the environment, safety, and other non-financial aspects of our society. While the
anti-social actions of some corporations have had grave effects on society, we also see
many cases of corporations acting aggressively for the benefit of society. However,
many of these actions – positive or negative – were not measured under traditional
corporate accounting practices, or rather in the case of environmental or social issues, it
was believed that corporate actions could be analyzed, evaluated, and indicated not as
accounting data, but only in the form of appended information. Even on the economic
side, because traditional corporate accounting has focused on “income calculations for
shareholders,” one cannot say that the information is necessarily beneficial to
stakeholders other than shareholders, making it difficult to say that proper corporate
evaluations have been conducted concerning non-financial aspects. Today, many believe
that this situation is what has led to decision-making by corporate managers and
corporate activity that heavily focus on short-term profits and an outbreak of serious
problems. In other words, there is the problem which phenomena that do not have a
clear effect on cash flow are often removed from the scope of corporate accounting.
Corporate accounting has been socially equated with providing information related to
“secure cash flow,” making it difficult to include phenomena for which the potential
effect on overall cash flow is unclear. From the beginning, corporate accounting
addresses a group comprised of a limited number of stakeholders we refer to as
“shareholders.” That is why a new accounting method is needed for evaluating
companies in terms of CSR.
Furthermore, from the operational standpoint, it has become increasingly clear that in
the long-term, incidents not subject to measurement under traditional corporate
accounting have direct and indirect effects on business performance and financial affairs.
For example, expenses related to addressing products or soil contamination stemming
from the use of toxic substances, damages from a recall resulting from lax adherence to
safety standards, increased revenue resulting from an improved corporate image due to
continued social efforts; the results of these phenomena suddenly materialize without

any financial effect process having been recognized through traditional accounting. The
reason for this is that the implementation of corporate accounting presumes the
measurement and reporting of data based on a monetary scale. This is because
traditional corporate accounting is a means for a party tasked by shareholders to execute
management operations to explain the status of business that occurred during the period
when that party was in charge and the interest of the shareholders are concentrated on
monetary matters.
In this way, it is extremely difficult to accurately evaluate a company simply based on

data related to traditional financial aspects. However, in recent years, more attention is
being paid to new types of corporate evaluations, including SRI (Socially Responsible
Investment) and environmental ratings. Amidst these recent trends, CSR accounting,
which aims to measure and indicate business activities from the perspective of CSR,
aims to go beyond financial factors and expand interests to include all stakeholders by
performing corporate evaluations that are more accurate from the long-term perspective
and have more social meaning. Accordingly, CSR accounting must promote voluntary
and healthy business activities on the part of corporations as well as function as a social
infrastructure that are sustainable and can be developed while ensuring the viable
coexistence of economic, environmental, and social structures.
It was exactly this perspective that served as the launch pad for discussion concerning
this revision (R-BEC007) of the guidelines. As such, the core of R-BEC007 focuses on
the creation of a CSR accounting framework that highlights this perspective. R-BEC007
revisions reflect our efforts to design a more refined CSR accounting framework that is
founded on problem awareness. These guidelines clarify, from the perspective of the
relationship between company and stakeholder, the social responsibilities that a
corporation must fulfill in order for CSR accounting to be realized. Furthermore, to
serve as a new gauge for corporate evaluations, these guidelines provide a theoretical
framework for accounting models that indicate the results of businesses that have
incorporated CSR into their management strategy.
In publishing R-BEC007, we kept the following in mind.

First is the recognition as “risks” of the significant effects CSR-related phenomena
have on company or any organization (hereinafter referred as “company etc.”) value.
Secondly, when conducting CSR activities, it is vital that a management system is
created within the corporate organization and that this management “process” be
controlled. In order words, when designing a CSR accounting framework, it must be a
scheme through which focus is placed on the state of the corporate organization creating
accounting information and that supports the autonomous and lateral reorganization of
the corporate structure. The third aspect is to design a scheme that will clarify
associations between information output by the CSR accounting system and financial
statements, and allow the accurate analysis and evaluation of the information. This will
prove vital to the functionality of an internal control system within an organization.
A major difference between R-BEC004 and R-BEC007 is that in R-BEC007 focus is

shifted to addressing the question of how to design and manage a CSR system that links
CSR activity definition methods and CSR quantification schemes with financial data in
hopes of increasing the reliability of financial reports. In other words, the greatest
characteristic of these guidelines is that R-BEC007 develops the CSR accounting
system as an extension of the corporate accounting framework, and calls for monitoring
to coincide with the establishment of an association between financial statements and
the CSR management system operation and administration process.
CSR accounting as detailed in these guidelines is viewed as a “means” to guide both

the economic and social aspects of a corporation toward a state of appropriate business
activities. As for a specific structure, these guidelines indicate a comprehensive image
of a CSR accounting framework that focuses on the “processes” involved in a corporate
organization's management system and places importance on how conventional
financial statements will be used to identify, measure, and evaluate “CSR-related costs”
spent as a part of CSR activities.
It is said “accounting is the sum of experience gained”. In creating this revised

version, we depended heavily on the many valuable comments and opinions we
received after the publication of R-BEC004. I would like to take this opportunity to
express my gratitude. It is our hope that these guidelines assist those considering

incorporating CSR accounting and, further, that these guidelines contribute to the
promotion of CSR activities as well as the development of sustainable corporate
management and increase corporate value.
December 27, 2007

Reitaku University Business Ethics
& Compliance Research Center
R-BEC007 Project
Leader: Kazuhiro Bai

R-BEC007 Project Member
Iwao Taka Professor at Reitaku University, Center head at R-bec
Tadashi Doi Professor at Reitaku University, Researcher at R-bec
Kazuhiro Bai Professor at Reitaku University, Researcher at R-bec
Kennichiro Yoshida Lecture at Reitaku University, Visiting Researcher at R-bec
Yasuhiro Yamaga Ferrow at R-bec
Kanae Teramoto Research Partner at R-bec
Takayuki Usuda Research Partner at R-bec
Yuka Shimizu Research Partner at R-bec
Yasuyo Zenjo Research Partner at R-bec

I. What Is CSR Accounting
(1) Purpose of CSR Accounting Guidelines
With a goal of developing a CRS-based sustainable social system, these guidelines

present a fundamental overview of CSR accounting2 and serve as a tool that contributes
to corporate CSR efforts and supports the incorporation and implementation of CSR
accounting.
While there is still no clear-cut outline of the concept of “CSR,” the hope is that, if
companies can quantify CSR activities, this will lead to the establishment of a social
system through which stakeholders can accurately understand, evaluate and support a
company and its activities. In consideration of this, these guidelines offer “CSR
accounting” as a system that measures CSR efforts in monetary terms. This system
applies accounting principles to identify, measure, and evaluate those efforts, and
produces reports consisting primarily of numerical data.
The purpose of CSR accounting is to use methods founded on accounting principles

to clearly identify how companies recognize and respond to their social responsibilities
according to their values, as well as how companies are contributing to society. Through
the application of CSR accounting, the corporate CEO is able to provide internal
managers and employees, as well as external stakeholders with information related to
CSR efforts and activities – the company's CSR-related policies, goals, and individual
roles – in an easily understandable format. In other words, CSR accounting is unique in
that it can prove beneficial in maintaining and improving company activities through
sustained communication with internal and external stakeholders.
Today, if companies fail to conduct operations with attention given to CSR, there is
concern that phenomena associated with CSR will one day suddenly appear as a
corporate risk. In order to preempt such situations, CSR accounting treats various
phenomena related to corporate CSR problems as risks and then identifies and evaluates
2. Refer to p.17 for a definition of CSR accounting.

in monetary terms the state of CSR risk management and activities related to the
corporate reorganization of organizational structure designed to address said risks. CSR
accounting then provides internal and external stakeholders with accounting information
that will prove helpful when making decisions.
The overall goal of CSR accounting is to provide society with a new perspective from
which to evaluate corporations through the dissemination of this new accounting
method and promote autonomous and healthy business activities as well as achieve the
sustained development of a society that balances economic, environmental, and social
issues.
(2) Characteristics of CSR Accounting
CSR accounting as outlined in these guidelines is meant to be a comprehensive

accounting system that is applied to all corporate activities related to economic,
environmental, and social aspects in addition to traditional financial activities. The main
characteristics of CSR accounting are summarized in the following three points.
(i) At the base of CSR accounting is the idea that the majority of business activities are
statistically measurable and it is commonplace to indicate them in some quantified form.
In other words, if a CSR accounting system is design based on this assumption, not only
will it become possible to perform international comparisons of the state of corporate
social responsibility, it also will be possible to use chronological analysis to determine
trends.
(ii) CSR accounting focuses on the company’s CSR management system (processes
used to build and improve the CSR management system) and performs from a monetary
perspective the identification and measurement of activities related to planning,
implementation and management, monitoring, and reevaluations. As such, CSR
accounting evaluates processes to determine whether or not the CSR management

system is being managed and operated effectively and uses monitoring and feedback to
improve management activities. This perspective places major focus on the reduction of
CSR risks and the appropriate execution of business activities.
(iii) The implementation of CSR accounting does not require that the company already
has established and is running a CSR management system. The implementation of CSR
accounting can be positioned as the first stage of CSR activities. In other words, it is
possible to begin by clarifying the company’s CSR activities based of the state of
management activities unveiled through CSR accounting, thereby using CSR
accounting as a tool that supports those newly defined activities and efforts.
(3) Fundamental Approach to CSR Accounting Guidelines
These CSR accounting guidelines were created based on the following ideas.
1) Background of CSR Accounting Efforts
The expansion of corporate transaction volume and scope of operations has seen the
effect companies have on society grown tremendously. As is characterized by corporate
scandals stemming from environmental problems and a focus on short-term profits, it
has become clear that limiting a company’s reason for being to the acquisition of
revenue gives way to the possibility of preventing sustained economic and social
growth. In other words, company management must understand that the basis of the
debate for CSR is transitioning from the perspective of “responsibilities” that a
company must fulfill to “strategy” and “management” that include the reduction of CSR
risks.
Companies involved in CSR must reaffirm the fact that the key to sustained social
and business development is the creation of a framework that merges CSR, which

addresses how to reduce CSR risks that have the possibility of significantly impacting
corporate value and how to implement the organizational changes required to make this
happen, with the entirety of business activities. As such, there is a need to clarify how
CSR should be positioned within corporate strategy and to work to expand the scope of
the company’s CSR activities to the level of establishing a management system that
promotes CSR efforts based on specific guidelines and goals.
Considering this, the information gained from traditional corporate accounting is not
sufficient for the external evaluation or internal management of company using
appropriate methods. Furthermore, there have been many cases where information
related to CSR activities was provided based on traditional reporting methods3, meaning
that CSR-related details were not being conveyed accurately or completely to both
external and internal stakeholders, making it difficult to ascertain the scope of actions
being undertaken.
Accordingly, if accounting information output via CSR accounting can be developed

as an extension of the traditional corporate accounting framework and published as key
points of CSR reports, not only will business stakeholders be able make specific
responses to corporate CSR activities, but also they will gain a greater understanding of
the comprehensive view of the company’s CSR activities. Conversely, CSR accounting
information can be used not only for external evaluations; companies should also have
sufficient incentive to incorporate such a system because of the benefits to internal
management.
These guidelines propose a new scheme wherein a CSR accounting system is

incorporated into the corporate accounting framework and used to determine whether or
not a company’s CSR risk management system is functioning effectively within the
corporate structure. If CSR risk management can be integrated into a company’s internal
control system and CSR accounting used to make situations more visible, not only will
3. The majority of CSR activities are not subject to measurement under traditional corporate
accounting. Also, CSR report forms are different from financial reporting forms in that their
creation is not required by law. As such, major issues such as how to ensure the transparency,
reliability, and comparability of disclosed information are left up to the judgment of the
company making the report.

companies be able to manage major risks, but also they can expect CSR accounting to
be effective as internal management reference information when determining the
efficacy of their management system.
2) Necessity of CSR Accounting and Merits of Implementation
Companies working to expand operations while being involved with a variety of

stakeholders have various levels of responsibility (accountability) to consumers,
transaction partners, investors, employees, and other stakeholders. However, currently
defined social systems related to corporate accountability only concern financial reports
to investors.
The disclosure of CSR accounting information is positioned as a vital means of

fulfilling the company’s general CSR accountability and, in order to increase the public
trust of the company, is something that is absolutely necessary. Information provided
through CSR accounting can tie into promoting the creation of an internal system used
to address CSR risks in addition to providing CEOs with new values and incentives, and
will contribute to the promotion of CSR activities. Furthermore, because CSR
accounting information also serves as corporate risk information, it can help ascertain
investment risks.
Based on the above, the incorporation of CSR accounting can provide a company
with the following merits.
(i) Until now, CSR activities have been reported mainly using qualitative data. However,
when quantitative data based on financial accounting is added to these reports, it
becomes possible to conduct chronological analysis and comparisons between
companies. As a result, companies are able to provide clearer explanations of efforts
related to CSR and it is easier for external stakeholders to conduct company evaluations
and analyses.

(ii) By collecting CSR accounting data, a company can promote the establishment of a
CSR management system. Evaluations based on CSR management system statistical
data will lead to clues about how to improve and review CSR efforts and make it
possible to conduct effective evaluations and review of corporate efforts.
(iii) CSR accounting information is an effective tool for external communication as well
as for internal communication. In particular, the collection of CSR accounting data will
increase employee awareness of CSR efforts and promote voluntary action, functioning
as an internal control for management operations.
3) CSR Accounting Addressed in These Guidelines
CSR accounting is divided into two categories: CSR for national or regional
governments, and CSR that focuses on businesses. The CSR accounting brought up in
these guidelines is mainly business-oriented CSR accounting. However, in anticipation
of possible future trends, in addition to private businesses, “businesses” in these
guidelines also include hospitals, schools, independent administrative organizations,
public service corporations, and municipal bodies.
Also, the type of information included in CSR accounting introduced in these

guidelines is information presented in monetary terms. This is because traditional
financial reporting, which focuses primarily on business activities, does not report much
CSR-related information and is limited in terms of its role as a system of information
disclosure and in aiding internal information management.
In addition, the efficacy of CSR data can be increased by focusing on its association
with management accounting and various management system standards.
The structure of these guidelines is depicted by the flow shown in Fig. 1.

Ⅴ
Ⅵ
Ⅱ
Ⅳ
Ⅰ What is CSR accounting
Ⅴ－（1） CSR Activity Calculations Forms
Ⅴ－1-1 Environment-Related Activity Calculation Form
Ⅰ－（1） Ⅰ－（2） Ⅰ－（3）

Ⅴ－1-2 Labor and Human Rights-Related Activity Calculation Form
Ⅴ－1-3 Product and Service-Liability Related Activity Calculation Form
Ⅴ－（2） Calculation Form Integrated with Income Statement
Ⅴ－（3） Stakeholder-Specific Distribution Calculation Form
CSR accounting Calculation Forms
Characteristics of CSR accounting

Disclosure of CSR accounting information
Purpose of CSR accounting guidelines

Meaning and Function of CSR Accounting
Fig. 1 General Structure of These Guidelines
Ⅲ Overview of CSR-related costs
Qualitative Characteristics of CSR Accounting Data

Ⅶ CSR accounting implementation/management process
Fundamental approaches to CSR accounting guidelines
R-BEC007 Page 17
II. Meaning and Function of CSR Accounting
(1) Definition of CSR Accounting
Within these guidelines, CSR accounting is described as follows.
CSR accounting is a process used to identify, measure, and present the state of CSR
risk management and activities related to the improvement of CSR performance in
monetary terms based on financial statements so that information users (corporate
internal/external stakeholders) can make assessments and decisions while having an
awareness of phenomena related to corporate CSR issues as a risk.
(2) Approach to CSR Accounting
Today, phenomena related to CSR are beginning to be clearly recognized as risks that
could have a significant effect on companies. When new phenomena (events typically
treated as developments stemming from exogenous factors) are to be identified and
evaluated via accounting-based methods, if these phenomena are not treated as the
results of endogenous developments and linked with financial statements as part of a
new accounting framework, it will prove difficult to accurately ascertain the status and
results of CSR activities.
In order to take another look at CSR-related accounting problems that up to this point
have been treated as exogenous factors, the progression of management accounting acts
must be looked upon as a collective “financial reporting process4.”From this collective
4. The financial reporting process means referring to the accounting process of each subject as a
series of linked actions (a process through which accounting actions are led by strategy, based on
this accounting information is created from general business activities, and this information is
then corrected and reported). Refer to the following literature for details: Imafuku, Aishi “Kigyo
Tochi no Kaikeigaku (3) (Business Administration Accounting (3)),” Kaikei (Accounting)
Vol.167 No.6, 2005, pp.125-126.

process, one must clarify how CSR-related phenomena are involved in the corporate
accounting framework.
Once this has been clarified, the main question facing CSR accounting is; in order to
integrate CSR framework into the overall corporate activities while still gaining the
understanding and support of internal and external stakeholders involved in CSR, what
perspective should be used to design a framework that will visually present data
beneficial to the promotion of an internal CSR framework, in relation to financial
statements.
In other words, the significant points concerning the design of a CSR accounting
framework are how a company views CSR in relation to its own corporate values, how
the company responds to risks, and how the company represents the CSR risk internal
control scheme from an accounting-based perspective.
When designing “CSR accounting,” an accounting system that identifies, measures,

and evaluates CSR activities in quantitative terms, these CSR accounting guidelines
have been constructed with an emphasis on the following three points.
(i) Company management structure must recognize CSR issues as “risks” that have a
major impact on corporate value (identify).
(ii) In order to improve the reliability of financial reporting, it is a scheme that can
control to reorganize process the organizational structure into a self-dependant and
lateral one that makes company-wide communication possible, to improve the style of
corporate organizational management used to produce accounting data for reporting, an
issue that deals with a company’s internal control (measure) .
(iii) It is significant to analyze and valuate a couple of information, after associated with
both information from CSR accounting system and it from and financial accounting
system (present and evaluation).

(3) General Structure of CSR Accounting
The overall general structure of CSR accounting as outlined in these guidelines is

shown in Fig. 2 on page 20. When designing a CSR accounting system, it is preferable
to take the steps based on this general structure.
The CSR management system, which is subject to CSR accounting, must not focus on
“results” but instead must include a scheme to control the “processes” used to fulfill
CSR-related requirements. However, in order to create a scheme that can control these
processes, compliance must be placed at the core of a CSR management system,
incorporating as many CSR fields as possible to the extent covered by existing law.
Further, this scheme would require incentives that recognize the achievement in these
areas.
The approach described above calls for the creation of calculation forms used in CSR
accounting, which presuppose a link with financial statements, and that consist of forms
that calculate and organize costs related to CSR activities from “environmental and
social aspects” adhering to the CSR management system format and also forms related
to “economic aspects,” on which items in income statements are rearranged to cover a
broader base of stakeholders.
In one example of calculation forms that link financial statements while also
organizing CSR activities is presented as follows: “Environment-Related Activity
Calculation Form,” “Labor and Human Rights-Related Activity Calculation Form,”
“Product and Service Liability-Related Activity Form” (collectively referred to as CSR
activity calculation forms), and “Stakeholder-Specific Distribution Calculation Form.”

1st Period
Management system
p.44.
ECS2000 implementation and operation
Planning Implementation and operation Monitoring and correction measures
Reevaluation by management
Accounting information system CSR accounting system
＜Ledger system＞＜CSR activity calculation form＞

●Environment-related activity calculation form
(1) CSR-related cost identification/measurement Cost
Activity category Previous Current
Transaction data
and CSR activity calculation form creation Link and tabulate data Shared E1
↓ ●Product and service liability-related activity
items
E5 calculation form
Journalizing CSR accounting data processing Management activity monitoring and feedback Independent E6 Cost
items ↓ Activity category Previous Current
E10
E1
●Calculation Form Integrated With Income Statement Shared
●Labor and human rights-related activity ↓
items
E5
calculation form
Feedback
CSR E LH PS E6
Journal Book Cost Independent
Sales Activity category ↓
Previous Current items
E10
Shared E1
売上原価
Sales costs
↓ Ｅ･･･Environment-related activity
items
E5 ＬＨ･･･ Labor and human rights-related
Gross profit on sales activity calculation form
Independent E6
↓ ＰＳ･･･ Product and service liability-related
General ledger Operating expenses items activity calculation form
E10
Data analysis and evaluation
Operation income
Non-operating expenses (2) Creation of Calculation Form Integrated ●Stakeholder-Specific Distribution Calculation Form
with Income Statement 区分
Category Previous
前期 Current
当期 Difference
増減
Trial Balance 営業外費用
Non-operating income
Distributed funds from clients
Work sheet Ordinary Income (3) Creation of Stakeholder-Specific Procurement expense from
Vendors and suppliers
Extraordinary gains Distribution Calculation Form 分配価値額
Distributed value
Extraordinary losses Internal
Balance sheets Data analysis and evaluation Capital investors
…
Income statement Local society
Public organizations
Internally retained
Distributed
分配額 amount
Other
Total
総合計
Fig. 2 CSR Accounting System General Structure
Feedback
2nd Period
Management system
ECS2000 implementation and operation
Planning Implementation and operation Monitoring and correction measures
Reevaluation by management
Accounting System”, Journal of Japan Society for Management Accounting, vol.8, 2007,
Source (Diagram): Bai, Kazuhiro, “Introduction and Operation Process of CSR
R-BEC007 Page 21
The above scope of CSR activities is a system organized to cover various areas
chosen based on considerations of domestic and foreign CSR-related standards and
guidelines. However, this does not necessarily make it a complete framework.
From the perspective of complying with a CSR management system while still
contributing to the creation of appropriate financial reports, it is preferable if the
organization itself determines its own areas of activity through communication with
stakeholders. Even when companies exert flexibility in the selection of areas in which to
conduct CSR activities, by establishing a CSR accounting model that is linked to
financial information, it would be more than sufficiently possible to ensure the ability to
compare accounting data.
(4) Basic Function of CSR Accounting
CSR accounting has two major functions: 1. a reporting function and, 2. a

management function.
It is vital for companies etc. that promote stakeholder engagement5 to conduct CSR
activities with these two functions working in an integrated system. In other words,
CSR accounting takes the standpoint that communication activities with stakeholders is
one function of corporate management and thus calls for a framework design with an
integrated perspective of the reporting function and the management function.
5. Stakeholder engagement means that the stakeholder is not simply an entity that receives
reports from the subject company, but a party who responds to the report, in a way that leads to
proactive involvement in the accountability process.

1) Reporting Function
(ⅰ) Communication with Stakeholders
The main focus of CSR accounting is to provide CSR data that is valuable to
stakeholders in the form of monetary information. The optimal CSR accounting
information announcement ties into fulfilling the company’s accountability to
stakeholders and increasing society's trust in the company while at the same time
contributing to ensuring social evaluations of the company from a more appropriate and
broader standpoint.
It is expected that in many cases CSR reports would be combined with

announcements concerning the state of the company etc.’s CSR efforts and specific
strategies. Not only will such reports provide an opportunity for employees and those
involved with the local community to understand the company’s philosophy and
business approach, but also will tie into stakeholders being able to be involved in the
company.
(ⅱ) Stakeholder-Specific Distribution of Information service
Traditionally, stakeholders have not been provided with information concerning their
position with the company or their relative position compared to other stakeholders.
CSR accounting uses “stakeholder-specific distribution calculation forms” to clarify the
relationships between a company etc., and among its stakeholders. The disclosure of
CSR accounting information is also expected to serve as a tool to aid conflict resolution
including distrust among stakeholders and cases of opposing interests. This information
will serve as objective data aimed at better relationship building.
There are many stakeholders that have some form of a relationship with a company.
While it is appropriate for CEOs to deal with stakeholders based on priority as a
company naturally is an economic agent, companies must take into account the
possibility of being slapped with representative actions under economic laws.

Thus far, we have not seen much concern regarding whether or not a stakeholder feels
that a company is giving unfair treatment to another stakeholder. However, CSR
accounting provides objective information that will prove beneficial to decision-making
concerning communication with stakeholders because the information highlights how
the company is handling relations with each stakeholder.
As shown above, a CSR accounting system provides CEOs and stakeholders with
information from the perspective of the stakeholder, something not provided by
traditional corporate accounting. Further, CSR accounting can help resolve conflicts of
interest among stakeholders.
2) Management Function
(ⅰ) CSR Activity Monitoring
The core of CSR accounting, the internal CSR accounting system, uses financial
statements (private cost items on the income statement) concerning normal business
activities to identify phenomena related to CSR risks as private CSR-related costs and
extracts this data in a format compatible with the CSR management system.
If through this internal CSR accounting system it becomes possible to identify

CSR-related costs that until now have been grouped together with private costs, it then
becomes possible in subsequent stages to perform a cost analysis by linking
CSR-related costs with other expense items on financial statements. Further, using this
newly visible accounting data, companies gain the opportunity to reevaluate current
CSR activities and consider new areas of activity.
Furthermore, through comparisons and analysis with financial statements expense

items, it is possible for the injection of new operating resources towards CSR activities
to be reflected in financial statements.

(ⅱ) CSR-related Operational Management
Through the quantitative identification and calculation of CSR activities, CSR

accounting focuses on the analysis and evaluation of “processes” and “results” related
to the company’s CSR management system. By performing this type of analysis and
evaluation, CSR accounting contributes to making appropriate management decisions
concerning CSR activities as well as promoting CSR efforts.
The CSR operational management function refers to an aspect of the CSR

information system of company etc. that functions to promote efficient and effective
participation in CSR activities through appropriate management decision-making based
on quantitative identification, calculation, analysis, and evaluation of the corporate
management system and CSR activities. Specifically, this function indicates
CSR-related costs for individual CSR activity categories from the previous and current
fiscal terms as numerical data. This information is evaluated to ascertain the effect CSR
activities have on business activities. By reviewing CSR-related costs spent toward CSR
activities, it becomes possible to verify whether or not the company’s CSR activities
were in line with CSR fundamental guidelines and management strategy and this data
can be used as the basis for the distribution of economic value to stakeholders.
In this way, the employment of CSR accounting can be expected to serve as an

operational management and communication tool for CEOs and relevant business
divisions. However, companies must question whether the CSR accounting information
adequately fulfills such a role. Furthermore, companies should expect that CSR
accounting information may not directly affect business performance and, in the short
term, could result in additional costs. From this perspective, if the company CEO does
not clarify their standpoint and views concerning these issues from a long-term
perspective, it will be impossible to effectively utilize the operational management
function gained through CSR accounting.

III. Overview of CSR-Related Costs
(1) CSR Accounting Positioning
To ensure the reliability and objectivity of information gained through CSR accounting,
it is absolutely necessary that it be interlinked with financial statements. Because of this,
it is necessary to establish how CSR-related costs will be organized and calculated as new
cost categories while interlinking this information with financial statements, and
providing a clear description of the positioning of this information.
This means it is necessary to design, introduce and operate a new accounting

framework that both separates and distinguishes the cost component, which is paid in
accordance with CSR activities that have not been recognized by conventional corporate
accounting, from the financial statements that is already borne within the company and
processed as internal expenses.
In other words, the main function of CSR accounting is to identify the portion of
expenses that is included in internal expenses but currently not recognized as
“CSR-related costs” in a format compatible with the existing management system and
then to organize and analyze these expenses as CSR-related costs. As such, attention must
be paid to the financial reporting process and the existence of CSR-related costs being
made clear.
The following is a detailed explanation concerning methods for identifying and

measuring CSR-related costs.
(2) CSR-Related Costs
The identification and measurement of CSR activities and efforts via accounting
method are performed by linking activity sector-specific CSR costs with financial

statements. First, categorize costs related to CSR expenditures as a result of business
activities and outline the CSR-related cost “scheme” and “categories.”
1) Cost Categorization
When designing a CSR accounting framework, first there is a need to divide costs
related to CSR expenditures stemming from business activities into the following three
categories.
z Private CSR-related costs ---

Costs related to corporate monetary expenditures.
z Latent CSR-related costs ---
Future expenditures expected as a result of involvement in CSR activities.
z Social CSR-related costs6 ---
Costs in the form of damages incurred by a third party (society) as a result of
corporate activities.
In general, “private costs” on income statements include “sales costs", “sales and
general administrative expenses”, “non-operating expenses”, and “extraordinary losses”.
With current corporate accounting, all monetary expenditures related to CSR issues are
grouped together with private costs. As such, in order to separate and distinguish between
private CSR-related costs, it is necessary to incorporate an “internal CSR accounting
system” into the corporate accounting framework.
The internal CSR accounting system here is a system which designs, introduces, and
operates a new framework for an accounting process interlinked with financial statements.
This framework is designed from a perspective outside that of financial statements based
on ordinary business operation, and its purpose is to identify phenomena related to CSR
6. “Social CSR-related costs” does not refer to cost accompanying monetary expenditures
resulting from business activities but refers to the impact on third parties (society), including
elements that cannot be expressed as a monetary figure.

issues as separate cost categories and extract this data in a format compatible with the
management system.
The reason for using the type of framework mentioned above is to clearly show
whether or not the company’s CSR activities and efforts are the result of a management
system used to promote company philosophies, management policies, fundamental CSR
guidelines, and CSR activities by showing the relationship between private CSR-related
costs and income data created from financial statements.
In other words, CSR accounting is meant to clarify the part of the traditional private
costs to be categorized as “private CSR-related costs” so that it can be used as basic data
to determine how much CSR risk has been reduced and also, to what extent CSR
performance has improved.
Fig. 3 Positioning of private CSR-related costs in I/S data
Financial Accounting: Income Statement

Expenses (total costs) = private costs Revenue
Production costs
Labor and human rights
Products and services
Sales costs
Sales
Environment
Sales and general

administrative expenses
Period costs
Non-operating expenses Non-operating income
Extraordinary losses Extraordinary gains
Private CSR-related costs

Source (Diagram): Bai, Kazuhiro, Bring in CSR Accounting, Tokyo: Japanese Standards
Association, 2005, 57. The above is an altered version of the original.

2) CSR-Related Cost Recording Standards
(Application of generally accepted accounting principles)

When recording CSR-related costs, generally accepted accounting principles are
applied.
(Object criteria)
The determination of whether or not a cost qualifies as a CSR-related cost is made
based on object criteria.
Object criteria, when recognizing cost, refers to an approach through which only
expenditures for the purpose of CSR activities are extracted as CSR-related costs.
(Amount recorded for compound costs)

When the expenditure is for a mix of CSR and non-CSR-related activities, costs are
recorded on the following rules.
1. When the amount used for CSR activities is clear, record that amount.
2. When a reasonable estimate can be made for the amount used for CSR activities,
record the estimated amount.
3. When a reasonable estimate cannot be made for the amount used for CSR
activities, record the amount calculated using objective guidelines that can be
consistently applied.

3) “Shared Items” and “Individual Items” as Activity Indices
CSR-related costs established in these guidelines are separated in two categories,

“shared items” and “individual items”, and then calculated.
{Shared items}
Activity indices treated as “shared items” refer to investment costs used toward the
construction of an corporate organizational system centered on ethics and compliance that
apply to items related to the construction, operation, and management of a system used to
determine whether or not activities and efforts are being performed in compliance with
the CSR management system in specific areas (environment-related activities, labor and
human right-related activities, and product and service liability-related activities) – i.e., to
determine whether or not a system has been established to manage CSR risks.
Monetary expenditure amounts based on these indices are indicated based on the
categorization of “previous term” and “current term.” By doing so, the company gains
base data that can be used to ascertain accurately whether or not a system capable of
reducing CSR risks has been established and to compare and verify facts, including the
specific activities and efforts that proved to be the major cause of those increases or
decreases.
To record costs resulting from the various CSR management system operational
processes (“planning,” “implementation and operation,” “monitoring,” and “evaluation”),
first the company must accurately ascertain the details of each process and then record the
costs based on the categories outlined below.
| 1. Creation of policy and action plan for CSR activities (P) |

This consists of costs related to the creation of compliance documents containing
information including CSR-related guidelines and implementation plans, training plans,
monitoring plans, and revision plans.

Furthermore, when there is a requirement for internal regulations concerning the
authority of the compliance department and audit division, or operation regulations for
internal and external help lines (help desks or public announcement channels), the costs
related to the establishment of these regulations are also included in this category.
Cost of create documents incurred for construction of the management system

● Creation of and revisions to codes of conduct and autonomous action standards
based on risk assessments
● Creation of documents to ensure consistency between codes of conduct,
autonomous action standards and internal regulations (authority regulations,
reporting advice/help line operating rules, due process penalty regulations)
● Creation of document management ledgers
Costs required for support and certification from external agencies
● Use of external consultants
● Acquisition of certification for management system
| 2. Addressing relevant laws and regulations (D) |

Record costs incurred to governance systems designed for implementation to CSR
activities, and miscellaneous activities related to laws and regulations.
Costs in association with the establishment of external help desks for Addressing
relevant laws
Costs related to efforts to comply with soil contamination and other laws
Costs related to efforts undertaken in anticipation of future laws
|3. Management system maintenance and operation (D) |

Record expenses incurred as the result of education or orientation provided to all
employees for the purpose of preventing internal infractions in business activities and
promoting appropriate CSR activities.

Costs related to the creation of an organization system required to maintain and
operate the management system
● Establishment of dedicated departments
● Clarification of responsibilities and authority between dedicated departments and
related departments
Costs required for the creation of educational material
Costs required to conduct continuous internal training based on a training plan
Costs required for external training and inviting external lecturers
| 4. Information disclosure (D) |

Record expenses related to the creation of materials and reports concerning CSR
activities (including CSR Reports) and communication with stakeholders.
Costs related to the creation of environmental reports, CSR reports, and materials
and reports necessary for public announcements.
Costs resulting from communicating with stakeholders.
|5. Audits and inspections (C) |

Record costs related to internal audits and regular inspections conducted to monitor
whether or not employees of the company or corporate group are conducting CSR
activities appropriately.
Costs required to create a monitoring/audit plan concerning management activities

and management system status.
● Creation of a plan concerning audit supervisors, audit format, audit procedures,
etc.
Costs required to conduct monitoring/audit concerning management activities and
management system status.
● Daily monitoring activities
● Awareness survey for directors and employees
● Regular internal audits

Costs required for the creation of internal audit materials
| 6. Reviews of the management system (A) |

Record expenses related to plans or measures to improve or correct management
problems that are identified through operation of the management system.
Costs required for the measures to review management problems

● Corrective measures for audited departments to address minor issues
● Review and improvement measures implemented by management to address
problems not solvable on site
Cost of revision documents incurred for reviewing of the management system
Cost required updates/rebuilding of the management system
{Individual items}
If the following costs occur, the company must create a new category separate from
"shared items", and using this address such cases as voluntary efforts, conflicts, and
damage compensation: (1) costs related to matters that clearly require maintenance and
improved, as determined through operation and management of the CSR management
system e.g. a case when penalty fees for legal infractions are discovered during a
management system operational process, or a case when some areas are recognized as
socially-related CSR activities; or (2) costs incurred by the company related to the
company's own social contributions. Establish the category of “individual items” as a new
activity index.
| 7. Voluntary management activities/efforts and social activities (D) |

Record expenses not applicable to the above “1” through “6” that resulted from the
maintenance and operation of the management system and expenses stemming from the
company’s own social contributions discovered through the operation of the management
system.

Figure 4 Flow of cost identification, measurement, and evaluation in CSR accounting
Management (business) strategy
Financial limitations
CSR activity basic policies
CSR activity indices 1

Establish “Shared items”
and “Individual items” Efforts to maintain and improve
CSR management system
CSR activity
calculation sheet
3
-Environment-related
Compare and analyze -Labor and human rights-related Check
CSR activity indices -Product and service liability- CSR-related cost
from previous and related, etc. increases/decreases
current periods
Feedback 2
Costs related to voluntary management activities through maintenance and

operation of management system
Costs related to activities other than those noted above aimed at the maintenance
and operation of the management system
Costs related to voluntary activities/efforts
Costs resulting from social contributions (donations, etc.)

| 8. Improvements and corrections (A) |
Record expenses incurred when operation of the management system leads to the
discovery that activities being undertaken by the company require revisions or corrections,
and the company carries out responsive action.
Costs related to repair and renovation activities

Costs incurred due to disputes, lawsuits, payment for damages, etc.
The categories and scope of activities outlined in these guidelines are examples
provided as reference. When identifying and measuring actual CSR-related costs, due
consideration should be given to the company’s management philosophy and objectives,
CSR activity guidelines, and stakeholder demands in establishing reasonable categories
and scope of activities based on the company’s own perspective.
(3) Designing an Internal CSR Accounting System
In order to identify the existence of CSR-related costs, there is a need to review the
state of internal information flow, which can be accomplished as part of the restructuring
process of the corporate organizational structure.
When designing a framework to ensure the effective functionality of a CSR accounting

system, we must organize the reasons for identifying and measuring CSR-related costs
while interlinking those costs to financial statements.
1) Basic Model of a CSR Accounting System
One of the functions of accounting is as an information provision system that fulfills

the needs of the users of that information by collecting and organizing business-related
transaction data and reporting on that information. Considering this, an accounting

information system must be able to provide accounting information that can be used in
multiple ways by various types of stakeholders.
As such, when designing an accounting information system, consideration must be

given to questions including “for whom is the accounting information being made,” “who
has interest in that information,” “for what purposes should accounting information be
provided,” and “what parameters define useful accounting information.”
The purpose of CSR accounting is to gather and process CSR-related transaction data
and provide reports of this data to internal and external information users. The root of this
lies in the reorganization of the organization’s internal information flow framework.
Accordingly, when determining the efficacy of CSR accounting, the key is whether or
not it is possible to establish a lateral flow of company-wide information across all
departments within the corporate organization and that has a focus on providing
information users with CSR-related accounting data necessary for financial and
management decision making.
With this in mind, the question is: from what perspective do we create a
cross-departmental information flow to ensure the effective use of CSR accounting within
a corporate organization? The answer to this question can be found by planning the
integration of various administrative systems, including the accounting system, extracting
CSR-related data from the accounting system, and work to create a system environment
that allows data to be processed as necessary.
In other words, if current department-specific information systems can be reevaluated

and reorganized into an information flow scheme that allows for the rebuilding of
organization and administrative workflows, this will tie into the creation of an
environment that will help management make appropriate decisions and promote the
accurate and timely provision of useful accounting data to information users.
These guidelines are oriented toward the design and operation of a CSR accounting
system that employs such an integrated information flow process.

Purchasing ＜Administrative system sector＞
Administrative
Place order systems
Production/purchasing
Production
Stock
information system Payables
･Business Inventory Sales/receivables

activities Sales
･CSR activities information system Sales cost
Shipping
Personal Salaries
Place order information system
Receive order
Sales Identify and separate cost categories

related to CSR activities
Breakdown
p.138. The above is an altered version of the original.

Accounting information
system
Fig. 5 Structure of an integrated accounting information system
＜Accounting information system sector＞
Source (Diagram): Bai, Kazuhiro, “ERP to Kaikei Joho (ERP and Accounting
Industrial Map for the IT Frontier), Eds. T. Nonoyama et al. Tokyo: Doyukan, 2001,
Information)”, Frontier no Kigyo Henkaku to Sangyo Map (Corporate Reform and an
R-BEC007 Page 37
2) Data Identification Framework
The object of what is identified, measured, and reported by CSR accounting, which
monitors the successfulness and progress of CSR activities from a cost perspective is
definitely the company’s activities. The CSR accounting model is formed by interlinking
CSR accounting with traditional financial statements.
In CSR accounting, cost categories are defined by each CSR activity and “CSR-related
costs” are extracted based on the management system flow. This means incorporating into
the traditional accounting information system a new scheme that separates and
distinguishes CSR-related costs, according to specific activities, from the overall
management activities.
For example, let us use “education and training expenses” as an example. When a
company undertaking CSR activities conducts education and training within the
organization, there are two types of education and training: one related to business
activities and the other education and training related to CSR activities. Under general
accounting treatments, these activities were not separated into detailed categories and
were lumped together under one account called “education and training expenses.”
However, using this form of accounting treatment, it is not possible to assess how much
capital was poured into education and training related to CSR and evaluate the actual
efficacy of the education and training, meaning that this accounting treatment cannot be
tied into future reviews and improvements. As a result, it is impossible to conduct an
accurate evaluation or analysis of CSR activities.
From this comes the need to identify and manage costs divided into separate CSR
activity categories. Specifically, the problem can be solved by assigning new code
numbers to the accounting in which all “education and training” activities were grouped
together and by incorporating an accounting processing system that further breaks the
categories down to a statement for each category.
For example, let us assume that a company, through the proper incorporation and
operation of a management system, recognizes its necessary areas of CSR action as
“environment-related,” “labor and human rights-related,” and “product and service

liability-related,” and conducts education and training in each of these areas to promote
CSR action. The CSR accounting system identifies and extracts from the standard
accounting system the portion of expenses expended toward these activities and clarifies
the nature of the costs for each activity, making it possible to analyze and evaluate the
level of achievement and progress.
CSR-related costs identified through the above flow are tabulated and organized on the
CSR activity calculation form, creating a system that allows the entire company to
browse CSR accounting information. If such an information flow is incorporated into
existing systems, this will produce a system that provides companies with the ability to
evaluate and analyze CSR activities in a timely and accurate way.
As explained above, in order to incorporate a CSR accounting system and use

accounting processes that monitor CSR activities, companies must understand the
importance of rebuilding their accounting information system in a way that allows for the
detailed categorization of costs for specific CSR activities.

IV. Qualitative Characteristics of CSR Accounting Data
(1) General Requirements and Prerequisites of CSR Accounting
When conducting CSR accounting, the general parameters (required information) for
information to be noted in financial reports are fundamentally no different from
financial accounting. In both cases, when disclosing information based on CSR
accounting, the reporting entity, a subject company, must eliminate significant errors
and bias due to arbitrariness and must accurately and clearly disclose vital information
that has been calculated based on generally accepted decision making.
CSR accounting is approached by (1) designing an internal CSR accounting system

that identifies and separates CSR-related costs. Next, in order to aggregate and organize
these separate and independent costs, (2) a calculation format (= CSR accounting
calculation forms) is created for each CSR activity category that is used to calculate and
organize in monetary terms costs related to maintenance and improvements to the CSR
management system for the previous and current accounting terms.
The highest priority for reports consisting of CSR accounting information identified,
measured, and calculated using this flow is to provide current and future investors,
claim holders, and other information users with information that will aid in making
reasonable decisions; and, to promote company communication with stakeholders
through CSR accounting information.
Considering the above, in addition to providing accounting information that is

reliable and consistent with its intended purpose, parameters that must be fulfilled
include making CSR understandable to a variety of stakeholders and ensuring that the
information chosen is consistent with what the stakeholders consent to having disclosed.
In order for CSR accounting to fulfill the above parameters and still function as it was
originally intended, the management structure that forms the foundation on which CSR
accounting stands must be transparent and CEOs themselves must be able to make
reasonable and neutral management decisions and act on those decisions.

CSR accounting is treated through an internal CSR accounting system that conforms
with the company’s existing management system. CSR accounting then indicates
CSR-related expenditures toward maintaining and improving the CSR management
system in the form of monetary information. Using this flow, CSR accounting is able to
identify, measure, and calculate the financial impact of CSR activities.
There are various types of qualitative characteristics that determines the usefulness of
CSR accounting information. Figure 6 below shows the associations between
characteristics that make CSR accounting information useful.
In order to increase the effectiveness of CSR accounting information, as with

corporate accounting, information included in CSR accounting must be created in
accordance with certain principles.
Major principles required by CSR accounting of the information disclosurer are

comprised of the following 16 items.
Fig. 6 Vital CSR accounting principles
A ： Prerequisites
(1) Transparency in management
(2) Fairness in management decision-making
B：Quality of information C：Reliability of information D：Ease of use of information
(3) Consistency with Purpose (4) Reliability (5) Understandability
1 Comprehensibility 1 Neutrality (6) Comparability
2 Importance 2 Traceability 1 Compliance with Standards
3 Completeness 3 Prudence 2 Sustainability
4 Substantiality 3 明瞭性
Timeliness

1) Principle Prerequisites
(1) Transparency in Management
In order for CSR accounting to be trusted and fulfill its original social and
management functions, companies must to a reasonable degree provide stakeholders
with a clear explanation of management philosophy and policies, specific management
methods, information disclosure and accounting policies.
(2) Fairness in Management Decision-Making
In order for CSR accounting to be trusted and fulfill its original social and
management functions, the corporate management organization must have a fair
decision-making process. When a CEO makes an individual decision, it should be done
after having acquired and analyzed as much information as possible and the decision
must be generally accepted as reasonable, appropriate, and free from bias.
2) Data Quality Principles
(3) Consistency With Purpose
CSR accounting must provide information that is useful to stakeholders’ decision

making and fulfills the needs of the information user. To ensure this, when conducting
CSR accounting, companies must give careful consideration to various stakeholder
needs and conduct multifaceted evaluations to determine, from the perspective of the
information user, the scope of information reported, information categories, and
information processing methods.

1 Comprehensibility
When implementing CSR accounting, the reporting entity makes a reasonable and
neutral determination of the scope of applicable stakeholders and be able to reevaluate
this decision as necessary. Further, to ensure that the information user is provided with
useful and meaningful information, the reporting entity, through systematic and
continued involvement with stakeholders, must ascertain and analyze stakeholder needs,
and fully identify, measure, and report vital information.
2 Importance
There are limits to economic resources but the arbitrary provision of information can
adversely affect the usefulness of information. When providing CSR accounting
information, companies must give consideration to stakeholder needs and business
environments as well as possible future effects, and make sure that priority is given to
vital information.
3 Completeness
Information categories that the company recognizes as being of significant interest to
stakeholders and possibly having a major impact on the business environment or future
business must be included in CSR accounting, and the company must make sure to
provide such information with thorough explanations and complete disclosure.
3) Data Reliability Principles
CSR accounting must eliminate significant errors and revisions of information in

order to gain the trust of stakeholders.
(4) Reliability
CSR accounting information must accurately calculate data based on objective proof.

1 Traceability
CSR accounting information must ensure traceability that leads back to the source of the
information. When making the necessary preparation for explanations and management
related to reported information, the reporting entity must ensure the objective
traceability of facts behind information.
2 Substantiality
CSR accounting information must be based on actual facts.
3 Neutrality
CSR accounting information must be bias free, neutral information created based on
reasonable judgment. As such, companies must create corporate organizational systems
that can ensure neutrality in judgments.
4 Prudence
Information that could lead to uncertainties must be handled prudently. As such, it is
vital that the basis for determining the nature and scope of information be clearly stated.
4) Principles Concerning the Ease of Information
(5) Understandability
In consideration of there being a diverse group of information users, every effort

should be made to ensure that CSR accounting information is understandable not only
to those with special knowledge or experience, but also to every level of information
user by providing reasonable and convincing information. Information must go beyond
formality to contain substance that accurately reflects the state of CSR.
(6) Comparability

CSR accounting must provide information that allows for comparisons between
accounting periods and comparisons between different companies. For this reason, it
must provide information for which similarities and differences are identifiable.
1 Compliance with Standards

It is vital that CSR accounting be conducted in accordance with generally established
CSR accounting practices or certain practices that may be established as standard.
2 Sustainability
In principle, accounting treatment principles and procedures must be consistently
applied using the same methods to every accounting period and maintain the uniformity
of the information. In the event of any changes, the company must provide an
explanation concerning the change and the effects of the change.
(7) Timeliness
CSR accounting must take into account the nature and importance of information and
ensure the timely provision of information so that information users are able to make
right and timely decisions. Accordingly, reports should not be limited to once per year
but instead companies must allow for the flexible reporting of information.

(2) Vital and Fundamental Elements of CSR Accounting
CSR accounting must be suitable to the company’s basic policies concerning CSR
and business strategy, as well as be related to stakeholder decision-making. As such,
when conducting CSR accounting, the following fundamental matters must be defined.
z Applicable period
z Scope of tabulations
z Tabulated categories
When publishing CSR accounting calculation forms, in addition to disclosing this

information, in the event of any changes the company must disclose vital matters that
have been changed, details concerning the changes, reasons for the changes, and the
impact of the changes.
1) Applicable Period
The applicable period should be, in principle, the company etc.’s fiscal year.
Furthermore, when making a report concerning CSR accounting, if the period covered
by the CSR report is different from the company’s fiscal year, this along with an
explanation of the reasons for the difference must be made clear.
2) Scope of Tabulations
In principle, the calculation scope of CSR accounting is CSR-related costs incurred

during the course of operations conducted by the company making the report. Business
as referred to here includes the company’s subsidiaries and affiliates.

However, in cases where there is insufficient data to perform identification,
measurements, and reports, when there is concern that some items may not be
applicable to “General Requirements and Prerequisites,” or when some items are
deemed not to have a significant effect on overall calculation results, such items may be
removed from calculations pursuant to the clear reporting of the facts and reasons.
3) Tabulation Categories
Categories subject to CSR accounting shall be those judged to be important based on

the reporting company’s systematic and sustained involvement with stakeholders and
the understanding and analysis of stakeholder’s various needs.
In these guidelines, CSR efforts are categorized as economic, environmental, or

social aspects and specific tabulation categories are then defined on the “CSR
accounting calculation form,” which is the primary medium for tabulating and reporting
information.
(ⅰ) Tabulation Items Related to Environmental and Social Aspects
By using the activity-specific calculation forms to aggregate and organize private

CSR-related costs of tabulation items related to economic and social aspects that have
been separated and divided via the internal CSR accounting system, it is possible to
clarify the financial effect that phenomena related to CSR problems have on corporate
value. In other words, the purpose of tabulation is to highlight the state of specific CSR
activities.
Activity-specific tabulation items indicate the specific details of the CSR activity
calculation forms (environment-related activity calculation form, labor and human
rights-related activity calculation form, product and service liability-related activity
calculation form, etc.) and the income statement-inclusive calculation form of these

CSR accounting calculation forms and income statements as well as facilitate the
comparison of this information with associated data.
(ⅱ) Calculation Items Related to Economic Aspects
On the “stakeholder-specific calculation form,” calculation categories related to

economic aspects indicate detailed information concerning how the reporting entity is
distributing economic value, gained through business activities (all figures on income
statement) to the stakeholders.
(ⅲ) System of “CSR Accounting Calculation Forms”
As a calculation and reporting means, the “CSR accounting form” system is as

follows.
(1) “CSR activity calculation forms”

1) “Environment-related activity calculation form”
2) “Labor and human rights-related activity calculation form”
3) “Product and service liability-related activity calculation form”
(2) “Income statement-inclusive calculation form”
(3) “Stakeholder-specific calculation form”
Furthermore, for information that is included in normal business activities but not
clearly noted in a CSR report, items that match the definition of CSR and items that are
deemed through an objective determination to apply to “General Requirements and
Prerequisites” may also be included as tabulation categories.

V. CSR Accounting Calculation Form System
CSR accounting calculation forms refer to calculation forms designed to identify,

measure, tabulate, and indicate results for specific content related to a company’s
environmental, social, and economic CSR activities. The CSR accounting calculation
form set consists of three types of calculation forms. The association between
calculation forms is shown in Fig. 7.
Fig. 7 CSR accounting calculation form system
CSR Accounting Calculation Forms
Environmental and Social Aspects Economic Aspects
1. CSR Activity Calculation Forms 3. Stakeholder-Specific Distribution Calculation Form
1 -1 Environment-Related Activity Calculation Form
1 -2 Labor and Human Rights-Related Activity Calculation form
1 -3 Product and Service Liability-Related Activity Calculation Form
2. Income Statement-inclusive Calculation Form
In the first stage of creating the CSR accounting calculation forms, on the assumption
of linkage with financial statements, costs resulting from the introduction and operation
of the CSR management system are aggregated and organized using the “CSR activity
calculation forms,” which are separated by the area of activity. In the second stage, the
“income statement-inclusive calculation form” is prepared in order to ascertain the
status of CSR efforts in relation to business activities in the context of financial data.

Lastly, in the third stage, stakeholder-specific distribution calculation forms are
prepared. On these forms, the categories of income statement have been rearranged in
order to be applicable to a broader range of stakeholders related to the company’s
economic activities. This stakeholder-specific distribution calculation forms allow the
company to clarify how economic value is being distributed to each stakeholder.
Explanations are provided below regarding the specific details of each calculation
form.
(1) CSR Activity Calculation Forms
The CSR activity calculation form, which is used for “environmental and social”
aspects of the company’s CSR activities, takes internal CSR-related costs identified and
measured by the internal CSR accounting system and calculates and organizes them
according to the activity-specific calculation forms ((1), 1) – 3) below). This allows the
company to clarify the financial impact that CSR-related phenomena have on corporate
value such as the state of action-specific CSR risk management.
We should notice that one vital point for a company to achieve sustainable
development is “the establishment of a CSR management system including the outlining
of fundamental CSR guidelines that are suitable to management strategy and a
long-term management policy that will help prevent CSR risks.”
It has been observed that organizing these efforts based on a set of established rules
and disclosing this information to internal and external stakeholders of the company
greatly contributes to the fulfillment of corporate accountability.
In order to process from an accounting perspective the financial impact of

CSR-related issues, we must implement CSR accounting based on the following flow:
(i) use the CSR management system to separate CSR activities into categories of
environmentally-related activities, labor and human rights-related activities, and product
and service liability-related activities, (ii) aggregate and organize private CSR-related

costs incurred by this operation and management process using the “shared items” and
“individual items” scheme pursuant to CSR management system.
1) Environment-Related Activity Calculation Form
The environment-related activity calculation form analyzes in detail aspects related to

environment-related activities using quantitative data gained from the shared and
individual cost items. This form is meant to serve as data for internal use to discuss
improving future CSR efforts.
Aspects related to environment-related activities as introduced in these guidelines

represent impact on nature system (ecological system, land, air, water, natural resources,
etc.) that the reporting entity may harm.
For environment-related activities, private CSR-related costs incurred by the operation

and management process of management system settled based on the company etc.’s policy,
are aggregated and organized using the “shared items” and “individual items” scheme.
(Form preparation principles)

1. On this calculation form, note CSR-related costs concerning environment-related
activities and the main details of those efforts.
2. The environment-related activity calculation form should consist of private

CSR-related costs incurred by the operation and management process divided using
the “shared items” and “individual items” scheme.
3. In the “shared costs” section on this calculation form, record such as amount of
private CSR-related costs spent toward restructuring the organization system in an
effort to reduce environmental risks.
4. In the “individual items” on this calculation form, record the amount of private
CSR-related costs incurred as a result of the company’s independent

environment-related activities identified through the operation of the CSR
management system.
First, we must begin by specifying the details of activities by the following operation
of the management system related to environment-related activities.
Formulation of a code of ethics and development of an implementation plan
for environment-related activities. Development of internal regulations for the
1. Management implementation of the ethical-legal compliance policy. External support,
system construction document preparation, certification assessment, and similar activities
conducted for the purpose of building an environment- related activity
management system.
Appointment of personnel and establishment of offices to administer the
ethical-legal compliance policy. Establish control of document. Efforts to
2. Management comply with relevant laws, planning and implementation of internal training,
system maintenance utilizing external training, inviting external lecturers and similar activities
and operation conducted for the purpose of maintaining and operating an
environment-related activity management system. Communication with
stakeholders
Environment-related management activities and activities related to checking
the status of the management system (Monitor compliance to the ethics policy,
3. Monitoring and
code of ethics and other manuals. Perform ongoing audits of the overall
audits
ethical-legal compliance management system.). Prepare and distribute reports
of audits and attitude surveys.
Revise the management system for the purpose of improving and correcting an
4. Improvements and
environment- related activity management system. Revise the ethical-legal
corrections
compliance policy, code of ethics and internal regulations.

CSR-related costs incurred as part of the operation of a management system must be
identified and measured as private cost related to business activities according to the
following scheme of “shared items” and “individual items.”
1. Creation of policy and action (1) Cost of create documents incurred for construction of the
plan for environment-related management system
activities (P) (2) Costs required for support and certification from external
agencies
2. Addressing relevant laws (1) Personal costs related to efforts to comply with relevant laws
and regulations (D) (2) Costs related to efforts undertaken in anticipation of future
laws
(1) Costs of managing documents incurred for maintaining and
operating a management system
3. Management system (2) Costs required for the creation of educational material
{Shared costs}
maintenance and operation (D) (3) Costs required for the implementation of continued internal
training
(4) Costs required for external training and inviting external
lecturers
(1) Costs related to the preparation of reports, and materials and
4. Information disclosure (D)
reports necessary for public announcements
(2) Cost of communication with stakeholders
5. Audits and inspections (C) (1) Cost of monitoring and audits

(2) Costs required for the preparation of internal audit materials
(1) Costs for reviewing measures related to management system

6. Reviews of management (2) Costs of revision documents incurred for reviewing of the
system (A) management system
(3) Costs required during updates/rebuilding of management
system
7. Voluntary management (1) Costs related to voluntary environment conservation
{Separate costs}
activities and Social activities activities/efforts

(D) (2) Cost of charitable contributions
(3) Cost of other activities that contributed to society
8. Improvements and corrections (1) Costs related to restoration and repairs

(A) (2) Costs incurred due to disputes, lawsuits, etc.

2) Labor and Human Rights-Related Activity Calculation Form
The labor and human rights-related activity calculation form analyzes in detail
aspects related to labor and human rights-related activities using quantitative data
gained from the shared and individual cost items. This form is meant to serve as data for
internal use during future evaluation of CSR efforts.
Aspects related to labor and human rights-related activities that the company’s
conduct gives an effect on human resources in the field of the company etc.’s practice
related to laborer and human rights including not only protection and respect of basic
laborer rights but also in terms of quality of the working environment and relationships
with employees (including part-time and contract workers) etc.
For labor and human rights-related activities, private CSR-related costs incurred by the
operation and management process of management system settled based on the company etc.’s
policy, are aggregated and organized using the “shared items” and “individual items” scheme.
(Form creation principles)
1. On this calculation form, note CSR-related costs concerning labor and human
rights-related activities and the main details of those efforts.
2. The labor and human rights-related activity calculation form should consist of
private CSR-related costs incurred by the operation and management process
divided using the “shared items” and “individual items” scheme.
3. In the “shared items” section of this calculation form, record the amount of private
CSR-related costs spent toward restructuring the organization system in an effort to
reduce labor and human rights risks.
4. In the “individual items” section of this calculation form, record such as amount of
private CSR-related costs incurred as a result of the company’s independent labor
and human rights-related activities identified through the operation of the CSR
management system.

of the management system related to labor and human rights-related activities
for labor and human rights-related activities. Development of internal
1. Management regulations for the implementation of the ethical-legal compliance policy.
system construction External support, document preparation, certification assessment, and similar
activities conducted for the purpose of building an labor and human
rights-related activity management system.

2. Management
comply with relevant laws, planning and implementation of internal training,
system maintenance
utilizing external training, inviting external lecturers and similar activities
and operation
conducted for the purpose of maintaining and operating an labor and human
rights -related activity management system. Communication with stakeholders
Labor and human rights -related management activities and activities related
to checking the status of the management system (Monitor compliance to the

3. Monitoring and
ethics policy, code of ethics and other manuals. Perform ongoing audits of the
audits
overall ethical-legal compliance management system.). Prepare and distribute
reports of audits and attitude surveys.
4. Improvements and
corrections


plan for labor and human management system
rights-related activities (P) (2) Costs required for support and certification from external
agencies
laws
{Shared costs}
training
lecturers


system
7. Voluntary management (1) Costs related to voluntary labor and human right-related
{Separate costs}
activities and Social activities activities/efforts

(D) (2) Cost of charitable contributions
8. Improvements and corrections

(1) Costs incurred due to disputes, lawsuits, etc.
(A)

3) Product and Service Liability-Related Activity Calculation Form
The product and service liability activity calculation form analyzes in detail aspects
related to product and service liability-related activities using quantitative data gained
from the shared and individual items. This form is meant to serve as data for internal
use to discuss improving future CSR efforts.
Product and service liability-related aspects as presented in these guidelines refer to

activities related to the effects that faulty products and/or services or improper
management of client information offered by a company have on consumers and clients.
For product and service liability-related activities, private CSR-related costs incurred by
the operation and management process of management system settled based on the company
etc.’s policy, are aggregated and organized using the “shared items” and “individual items”
scheme.
1. On this calculation form, note CSR-related costs concerning product and service
liability-related activities and the main details of those efforts.
2. The product and service liability-related activity calculation form should consist of
private costs incurred by the operation and management process divided using the
“shared items” and “individual items” scheme.
3. In the “shared costs” on this calculation form, record the amount of private
CSR-related costs spent toward restructuring the organization system in an effort to
reduce product and service liability risks.
4. In the “individual items” on this calculation form, record such as amount of private
CSR-related costs incurred as a result of the company’s independent product and
service liability-related activities identified through the operation of the CSR
management system.

of the management system related to environment-related activities.
for product and service liability-related activities. Development of internal
1. Management regulations for the implementation of the ethical-legal compliance policy.
system construction External support, document preparation, certification assessment, and similar
activities conducted for the purpose of building an product and service
liability-related activity management system.
2. Management comply with relevant laws, planning and implementation of internal training,
system maintenance utilizing external training, inviting external lecturers and similar activities
and operation conducted for the purpose of maintaining and operating an product and service
liability-related activity management system. Communication with
stakeholders
Product and service liability-related management activities and activities
related to checking the status of the management system (Monitor compliance

3. Monitoring and
to the ethics policy, code of ethics and other manuals. Perform ongoing audits
audits
of the overall ethical-legal compliance management system.). Prepare and
distribute reports of audits and attitude surveys.
4. Improvements and
corrections


plan for product and service management system
liability-related activities (P) (2) Costs required for support and certification from external
agencies
laws
{Shared costs}
training
lecturers


system
7. Voluntary management
{Separate costs}
(1) Costs related R&D activities of care for CSR

activities and Social activities
(2) Cost of charitable contributions
(D)
(3) Cost incurred by social contribution activities
8. Improvements and corrections (1) Costs resulting from recalls and claim response
(A) (2) Costs incurred due to disputes, lawsuits, etc.

(2) Income Statement-Inclusive Calculation Form
The income statement-inclusive calculation form is a form that merges the results of
measurements and tabulations for individual activities related to environment, labor and
human rights, and product and service liability with the company's income statement.
Categories calculated and reported using this income statement-inclusive calculation

form are quantitative information concerning the status of the reporting entity’s CSR
activities and actions related to maintenance and improvement. These documents
represent the core of CSR accounting information. Using this information, CSR
accounting information users are able to ascertain the state of a reporting entity’s CSR
activities efforts and the status of the reporting entity’s responses.
In other words, CSR-related costs calculated using the CSR activity calculation form
are finally merged with income statement data to serve as a decision-making resource to
aid in the judgment of whether or not activities were implemented in accordance with
the fundamental CSR philosophy and management strategy. Together with the
stakeholder-specific distribution calculation form, which is used to clarify how
economic value is being distributed between multiple stakeholders, this information is
used to confirm the progress of CSR activities and analyze the source of costs.
1. To achieve the merger of income statement data and CSR activity calculation form
data, this calculation form should use the same cost items as those used on the
income statement with costs allocated to specific CSR activity categories.
2. CSR-related costs of each activity category recorded on this calculation form

should be combined with data from each CSR activity calculation form and
calculated and recorded according to the cost items used in the income statements.
3. The cost data for each CSR activity category tabulated in this calculation form
should be the aggregated totals of the CSR-related costs for each activity category
for each income statement cost item for the purpose of clearly showing the
relationship between business activities and CSR activities.

(3) Stakeholder-Specific Distribution Calculation Forms
The stakeholder-specific distribution calculation form, which deals with the

“economic” aspects of CSR activities, is unique in that while traditional financial
statements focus primarily on estimating shareholder profit, this form focuses on
clarifying the current status in respect to distribution of economic value of the reporting
entity to multiple stakeholders. Further, this form serves to indicate the source of all
economic value calculated during the reporting period as well as the status of the
distribution of that economic value.
The source and distribution status of all economic value recorded on the calculation
form is based on figures taken from financial statements (income statement) and
categorizes data into items of “resources for distribution,” “procurement expenses,”
“distributed amounts,” and “other adjustments.” Furthermore, this scheme is designed
so that the total amount of “distributed amounts” and “other adjustments” matches the
distributed value amount.
In this way, the stakeholder-specific distribution calculation form is intended to apply

to a wider range of stakeholders and is created to clarify how economic value gained
through business activities was broken down and distributed to stakeholders.
Furthermore, the question of what type of distribution arrangements are most

preferred is something that must be determined by the reporting entity management
based on the reporting entity’s own values and judgment under the relationship with
specific stakeholders. Likewise, users of the information should also evaluate the
distribution situation based on their own values and judgment.
(Form preparation principles)

1. To clarify how economic value is distributed to multiple stakeholders, this
calculation form must include the sources of all economic value of the reporting
entity for the reporting period as well as the details of distribution.
2. The sources of all economic value for the reporting period and the distribution
should be based on figures gained from appropriate financial statements.

3. Categories for this calculation form should be “distributed resources,”
“compensation expenses,” “distributed amounts,” and “other adjustments.”
4. Resources for distribution should be the total amount of business revenue (for
example, net sales), non-operating income, extraordinary gains, appropriation of
profit, etc.
5. Procurement expenses should consist of payments (a component of sales costs and
sales and general administration expenses) to suppliers (vendors).
6. Subtract procurement expenses from resources for distribution to calculate the total
for distributed value.
7. The amount of distribution is comprised of amounts distributed to stakeholders
such as internal personnel (directors, employees, contract staff), capital investors
(shareholders, financial institutions), local communities, and public organizations
(national and municipal governments). Furthermore, as a reference index of
distributed amounts, income statement items corresponding to categorized
stakeholders are shown below.
8. The “Other adjustments” category for items not shown above should consist of
“penalties,” “compensation,” and “other adjustments.”
9. The amount of the “Other adjustments” category should be determined in a way
that the sum of the distributed amount and “Other adjustments” category described
in the above “8” matches the distributed value.
10. The method for calculating recorded figures must not be changed unless there are
justifiable reasons. In the event a change is made, the change itself, the reasons for
the change, and the amount affected by the change should be noted. Furthermore,
this principle applies to all charts below.

Stakeholder Corresponding income statement category
- Clients Operating income
Interest and dividends received and other non-operating income

- Other
Extraordinary gains
- Venders, suppliers Sales costs, a part of sales and general administrative expenses
Compensation and bonuses for directors and corporate auditors,

- Directors and
stock options, retirement benefits, provision of the reserve of
corporate auditors
retirement benefits, pension expenses
Salaries expense, bonuses, legal welfare expense, welfare expenses,
- Employees retirement benefits, provision of the reserve of retirement benefits,
pension expenses, pension expenses
- Contract employees Personnel expenses, etc.
- Shareholders Dividends paid
- Financial institutions Interest paid, etc.
- Local community Charitable donations
- National government Income taxes, tax and public dues
- Municipal government Resident taxes, enterprise taxes, tax and public dues
- Retained earnings Earned surplus carried forward, depreciation expenses

VI. Disclosure of CSR Accounting Data
These guidelines place importance on the use of the CSR accounting reporting
function to promote the proactive disclosure of CSR accounting information
The disclosure of CSR accounting information should include the following

information categories as well as the results of calculations performed and organized for
each category of the activity calculation forms used to report the status of a company’s
CSR activities.
(1) Information Included in CSR Accounting Disclosure
The following information should be included in the disclosure of CSR accounting

information.
- Purpose of CSR accounting

- Prerequisites of CSR accounting calculations
- CSR accounting calculation results
- Calculation standards used in CSR accounting calculations
- An explanation of CSR accounting calculation results
- Relationship to other CSR accounting categories
1) Purpose of CSR Accounting
Note the purpose of conducting CSR accounting and the purpose of disclosure.
2) Calculation Prerequisites
Include the following information.

(i) Accounting period
(ii) Scope of calculations
- For corporate groups, the name and total number of affiliates
- For business groups, the office names, business office extraction standards, main
offices excluded from calculations and the reasons for exclusion.
(iii) Calculation categories
3) Calculation Results
Include CSR accounting calculation results. Furthermore, when CSR accounting

information is to be reported using the CSR report form, you must ensure consistency in
reporting categories on the CSR report forms.
(i) CSR related costs

(ii) Relevant income statement categories
4) Calculation Estimation Standards
Note the standards for calculating costs related to CSR activities. Further, if there is a
change in calculation standards, include the fact that a change was made, the details of
the change, and the reasons for the change and the effects of the change (quantify as
much as possible).
(i) Scope of costs related to CSR activities

(ii) Methods for calculating depreciation
5) Explanation of Calculation Results
Regarding the results of calculations in “3,” the company should note: the
increases/decreases compared to the previous year and their reasons; the company’s

own evaluation of the calculation results, and how the results will aid the maintenance
and improvement of future CSR activities.
(2) Basic Format of CSR Accounting Calculation Form
These guidelines use the calculation forms indicated in page 67 onward as the
standard forms for CSR accounting calculation forms. Moreover, additional
categorization, addition of items and further subcategorization can be made to suit the
company’s specific CSR activities, scope of stakeholders, or utilization of information.
These guidelines present the “CSR activity calculation forms” on which to record
specific CSR activities for environment-related actions, labor and human rights-related
actions, and product and service liability-related actions, the “income
statement-inclusive calculation form” used to show the total results for these
calculations, and the “stakeholder-specific distribution calculation form,” which
indicates the amount of economic value and the overall ratio represented by this amount
distributed to stakeholders.
The procedure for creating calculation forms for use as CSR accounting information,
after the CSR activity policy has been clarified, involves first using CSR activity
calculation forms to calculate category-specific data, then using the income
statement-inclusive calculation form to calculate and organize the data recorded on CSR
activity calculation forms, and lastly, creating the stakeholder-specific distribution
calculation form.
Furthermore, use the “notes concerning effect” column, to note main details and
corresponding costs. By disclosing this information in the calculation forms, the
information user is able to use the details of the forms, coupled with details in other
calculation forms, to gain a better understanding of the company’s involvement and
commitment towards CSR.
The basic format for the CSR accounting calculation forms is shown in page 67
through page 71.

1) CSR Activity Calculation Forms
(ⅰ) Environment-Related Activity Calculation Form

Scope of calculations：( )
Period: [MM DD YY]―[MM DD YY] (Unit: Millions of yen)
Cost Applicable
income
Activity area category
Previous Current statement
category
E1 Creation of policy and action plan for environment-related activities (P)
(1) Cost of create documents incurred for construction of the management system
(2) Costs required for support and certification from external agencies
E2 Addressing relevant laws and regulations (D)
(1) Personal costs related to efforts to comply with relevant laws
(2) Costs related to efforts undertaken in anticipation of future laws
E3 Management system maintenance and operation (D)
(1) Costs of managing documents incurred for maintaining and operating a management
system
(2) Costs required for the creation of educational material
(3) Costs required for the implementation of continued internal training
Shared
(4) Costs required for external training and inviting external lecturers
costs
E4 Information disclosure (D)
(1) Costs related to the preparation of reports, and materials and reports necessary for
public announcements
E5 Audits and inspections (C)
(1) Cost of monitoring and audits
E6 Reviews of the management system (A)
(2) Costs of revision documents incurred for reviewing of the management system
(3) Costs required during updates/rebuilding of the management system
Subtotal
E7 Voluntary management activities/efforts and Social activities (D)

(1) Costs related to voluntary environment conservation activities/efforts
Separate
costs
E8 Improvements and corrections (A)
(1) Costs related to restoration and repairs
(2) Costs incurred due to disputes, lawsuits, etc
Subtotal
Total
(Purpose of creation)
The purpose of this form is to clarify, in monetary terms, the level of the company’s [Remarks concerning efficacy]
environmental awareness in its activities. Corresponding cost
Main points
category
(Points of importance regarding the creation of this form)
(1) Calculation methods should not be changed without a justifiable reason. In the event
methods are changed, note the fact that a change was made, the reason for the change,
and the effects of the change.
(2) If a baseline period is to be used, note the baseline period.
(3) Depreciation costs should be noted separately, or as a part of expenses.
(4) If it is not possible to ascertain the breakdown of expenses for shared costs and separate
costs, you may record the total amount. Also, the total amount may be broken down into
amounts incurred by specific departments. If this is done, make a note of it.
(5) Regarding efficacy, note the main points and the corresponding cost category.

(ⅱ) Labor and Human Rights-Related Activity Calculation Form
Cost Applicable
income
category
L1 Creation of policy and action plan for labor and human rights-related activities (P)
L2 Addressing relevant laws and regulations (D)
L3 Management system maintenance and operation (D)
(1) Costs of managing documents incurred for maintaining and operating a
management system
Shared
costs
L4 Information disclosure (D)
L5 Audits and inspections (C)
(2) Costs required for the creation of internal audit materials
L6 Reviews of the management system (A)
Subtotal
L7 Other management activities/efforts and Social activities (D)
(1) Costs related to voluntary labor and human right-related activities/efforts
Separate (2) Cost of charitable contributions
costs (3) Cost of other activities that contributed to society
L8 Improvements and corrections (A)
(1) Costs incurred due to disputes, law suits, etc
Subtotal
Total
involvement in labor and human rights related activities. Corresponding cost
Main points
category
(4) If it is not possible to ascertain the breakdown of expenses for shared costs and separate
costs, you may record the total amount. Also, the total amount may be broken down into
amounts incurred by specific departments. If this is done, make a note of it.

(ⅲ) Product/Service Liability-Related Activity Calculation Form
Cost Applicable
income
category
P1 Creation of policy and action plan for product and service liability-related activities (P)
P2 Addressing relevant laws and regulations (D)
P3 Management system maintenance and operation (D)
(1) Costs of managing documents incurred for maintaining and operating a management
system
Shared
costs
P4 Information disclosure (D)
P5 Audits and inspections (C)
(2) Costs required for the creation of internal audit materials
P6 Reviews of management system (A)
Subtotal
P7 Voluntary management activities/efforts and Social activities (D)
(1) Costs related R&D activities of care for CSR
Separate
costs (3) Cost of other activities that contributed to society
P8 Improvements and corrections (A)
(1) Costs resulting from recalls and claim response
(2) Costs incurred due to disputes, lawsuits, etc
Subtotal
Total
involvement in product and service liability related activities. Corresponding cost
Main points
category
(4) If it is not possible to ascertain the breakdown of expenses for shared costs and
separate costs, you may record the total amount. Also, the total amount may be broken
down into amount incurred by specific departments. If this is done, make a note of it.

2) Income Statement-Inclusive Calculation Form
CSR activity calculation form data
CSR-related Environment Labor and Product and

cost total human rights service
（）（）（） liability
（）
Sales （）
Sales costs （）（）（）（）（）
Gross profit on sales （）
Sales and general

（）（）（）（）（）
administrative expenses
Operating income （）
Non-operating income （）
Income statement data
Non-operating expenses （）（）（）（）（）
Ordinary income （）
Extraordinary income （）
Extraordinary losses （）（）（）（）（）
Income before income taxes （）
Income, residence,
（）
and enterprise taxes
Term net income （）
Profit brought forward

（）
from the previous term
Unapropriated income
（）
for the current year
The purpose of this form is to merge income statement calculation with CSR activity form cost data and
analyze and evaluate the ratio of CSR activity-related costs within business operations.

(1) Cost items for each CSR activity calculation form should be noted together with corresponding cost
items from the income statement.
(2) If a change in accounting policies for financial accounting have an effect on these figures, make a note of
this effect.

3) Stakeholder-Specific Calculation Form
Scope of calculations: ( )
Period: [MM DD YY] – [MM DD YY] (Unit: Millions of yen)
Stakeholder Previous term Current term
Category Change
breakdown (ratio %) (ratio %)
(1) Social contributions
- Clients
through business activities
Source
(1) Distributed resources
- Others
not from sales
Procurement: (2) Payments to
- Vendors, suppliers
suppliers
Difference: (3) Amount of distributed value
Directors
(4) Internal Employees
Contract staff
Shareholders
(5) Capital investors Financial institutions
etc.
(6) Local communities
National
government
(7) Public sector Municipalities
(8) Internally retained Internally retained

Distributed amount
(9) Penalties and monetary compensation
(10) Other adjustments
Total
The purpose of this form is to clarify how economic value gained through business activities was
distributed between stakeholders as well as to different CSR activity areas.

(1) Company management should provide its own evaluation of the state of distribution as well as notes on
future distribution policies.
(2) In principle, this calculation form should be based on accurate financial figures. If a change in accounting
policies for financial accounting have an effect on these figures, make a note of this effect.
(3) Calculation methods should not be changed without a justifiable reason. In the event methods are
changed, note the fact that a change was made, the reason for the change, and the effects of the change.
(4) If the scope of calculations of particular information is not in line with overall guidelines, make a note of
this and note the reasons. Further, changes to the scope of calculations shall be treated the same as
changes to calculation methods.
(5) For significant increases/decreases, analyze the cause and provide specific comments.
(6) If the “Other adjustments” category is a negative number (the amount of distributed value is greater than
the amount of resources for distribution), provide a breakdown of the resources.

VII. The Process of Introducing and Operating Systems
for CSR Accounting
Through the operation and management of the management system, a company etc.
must judge which CSR activities to conduct. To explain the process of introducing and
operating CSR accounting, first we must provide a general overview of how the CSR
management system and CSR accounting system combine to support corporate
management and the information flow of the CSR accounting system employed in the
corporate organization.
First, we will provide an outline of the process of introducing and operating a

management system, concentrating on the question of how to construct a management
system within an corporate organization, and referring to ECS2000 (Ethics-Compliance
Management System Standard 2000), the management system standards published in
May 1999 by the “Business Ethics and Compliance Research Project” of the Reitaku
University Economics Research Center. 6
(1) ECS2000 Framework as a Management System
In these guidelines, CSR consists of “compliance in the narrow sense,” “ethical

implementation (compliance in the broad sense),” and “social contributions” and we
argue that by implementing these phases in stages, CSR activities can be approached
more effectively.
7. We will explain ECS2000 using the Iwao Taka’s “ECS2000 Konoyou ni Rinri Horei Junshu
Management System wo Kochiku Suru (ECS2000: Building an Ethics and Legal Compliance
Management System)” (JUSE, 2001). However, because this standard requires for corporations
to establish an ethics and compliance system within their organization, it is referred to as the
“ethics and legal compliance management system”.

The first phase of CSR is “compliance in the narrow sense” and here, focus is on
implementation of the bare minimum of efforts to avoid infringing on legal boundaries.
The second phase “ethical implementation” refers to efforts that reflect and focus on
fulfilling the intentions of the law. The third phase “social contributions” refers to
actions that are not otherwise required by outside parties but are independent actions
seen by the company itself as necessary.
The relationship among these phases is shown in Fig. 8.
Fig. 8 Corporate social responsibility phase
PHASE 2 PHASE 2
SCOPE OF COMMITMENT
Do right. Develop self.

Be honest. Help others.
Full
Be fair. Improve the community.

Keep promises. Promote human dignity.
Obey spirit of law. Be courageous.
PHASE 1 PHASE 2
Avoid wrong. Maintain self.
Avoid fraud. Avoid harming others.
Basic
Avoid theft. Avoid injury to community.

Fulfill contracts. Respect human rights.
Obey letter of law. Be considerate.
VALUES
Justice Humanity
Source (Diagram): Paine, Lynn Sharp, Value Shift: Why Companies Must Merge Social and
Financial Imperatives to Achieve Superior Performance, McGraw-Hill, 2003, p.68.
(Elements added)
To conduct responsible management, that is, management that considers ethics and
compliance and which works to minimize possible future risks, a company must
establish a framework that can accommodate these efforts. ECS2000 calls for the use of
the same framework that is applied to ISO management system standards to implement
and operate a scheme that manages activities related to ethics and compliance.

ECS2000 outlines the need for a system that is able to ascertain the status of a
company’s ethics and compliance, that is, its efforts related to CSR, and which includes
a process for proposing and promoting reasonable improvement plans based on a solid
understanding of the system.
Up to this point, not many actions have been taken to include a financial perspective
in these efforts. However, in terms of operating a management system, it is more
effective if efforts are evaluated with consideration given to the state of financial
figures.
In other words, by introducing a CSR accounting system, extracting previously

non-recognized CSR activity-related figures from traditional accounting information,
and creating CSR accounting calculation forms, it is possible to use this data for the
evaluation, analysis, and review of CSR activities.
Now, it is important that we confirm the following four points concerning the
introduction and operation of ECS2000.
The first point involves placing the focus on initiating efforts to address ethical and
legal compliance. There are few companies where perfect ethical and legal compliance
structures are established from the very outset. As such, it is important that the company
realizes that its compliance system is not perfect and that the first step is to work toward
building the management system.
Second, it is important that the company works to institute continuous improvements.

Considering the fact that, as noted above, there are few companies with perfect systems
in place, companies must work continuously to incorporate improvements into their
systems. The first step is to establish simple rules and work to thoroughly enforce them.
While reviewing the results of these efforts, necessary elements can be added and
unnecessary elements can be removed. This type of flow is most realistic, and help
establish a system that most suited to a company’s specific needs.
The third point is to focus on the company’s social accountability. By being aware of
and controlling corporate risks, and by establishing a system that enables the company
to explain those risks, it becomes possible to reduce the level of incompleteness of the

company structure that serves as the base of collaboration.
The fourth point is to focus not only on the act of creating a system, but also on the
actual results. From the perspective of increasing efficacious ethical and legal
compliance, the company must press for continued improvements.
The basic framework of ECS2000 consists of four fundamental processes: (1) Plan,
(2) Do, (3) Check, and (4) Act. By continuously repeating these processes, a company
will be able to create a management system that will realize the restructuring of the
company organizational structure.
(2) CSR Accounting System Introduction and Operation Process
Next, we specifically address what types of procedures should be followed in order to

introduce and manage a CSR accounting system. Considering that CSR accounting is a
tool used to support CSR management and serve as a management system monitoring
function, it is preferable that the company creates a management system that will be
subject to CSR accounting identification and measurement prior or simultaneous to
incorporating the CSR accounting system.
A CSR accounting system is a mechanism that uses financial data on monetary base
processed via normal corporate accounting to identify and measure efforts and activities
conducted to address various CSR risks that threaten business operations. Accordingly,
in order to distinguish the costs incurred as a result of CSR activities from conventional
private costs, the company must build a scheme that extracts CSR-related costs from the
traditional accounting information system.
Next, the following processes are used to outline the CSR accounting system
implementation and management process.
1. Interlinking data
2. Data tabulation
3. Data analysis

4. Data disclosure
1) Interlinking Data
There are many possible types of CSR activities depending on the company’s industry,
business category, and business philosophy. One of the most important aspects of CSR
is to determine what CSR means for the specific company and who the company’s
stakeholders are, and share an understanding of these issues throughout the company. To
achieve this, the launching point for CSR activities is using the structure and operation
of ECS2000 (CSR management system) as a way to define the company’s areas of CSR
activities and its stakeholders.
From there, the company must establish and operate an ethics and legal compliance
system that conforms to the management system. This will result in the company being
able to designate CSR activities and designate activity categories for identified CSR
risks found in the company. Once the development of this internal system is complete,
the company will be able to use the CSR accounting system to identify and evaluate the
operational status of the management system from a financial perspective. The
guidelines place emphasis on calculating CSR-related costs using CSR calculation
forms in categories such as “environment-related activities,” “labor and human
rights-related activities,” and “product and service liability-related activities,” so that
detailed CSR activities can be analyzed in terms of costs.
The right and timely distribution of resources towards CSR-related costs is vital to
reducing CSR risks. As such, companies must establish an association between
CSR-related costs and business operations and, further, conduct chronological analysis
and evaluations. To ensure that the company’s CSR-activity progress can be accumulate
in a database as accounting information that is always available for use, accounting data
must be identified for each business activity and area of CSR activity. A major theme of
these guidelines is to use daily accounting processes performed via an accounting

information system to separately identify CSR-related costs, create a more detailed
version of the cost system, and link this data to financial data.
The question we must address now is; what kinds of measures are required in order to
utilize a management system to ascertain and control CSR risks? Next, we examine how
cost categories related to CSR risks measures should be identified and tabulated, and
how this information should be linked to a CSR accounting system.
In order to achieve CSR activities that are implemented laterally throughout an

organization, the most important task is to establish an internal management system.
Furthermore, some method must be used to ascertain whether or not such a system is
being operated properly and producing a certain level of results. In such a case, by
introducing CSR accounting, which monitors CSR activities from the financial
perspective, it becomes possible to pursue the elements required of a management
system, namely, the continuous improvements, accountability, and the financial support
emphasizing results over formality.
In the CSR accounting system, costs incurred as a result of activities and efforts
implemented to establish an ethics and legal compliance system in the initial stage when
ECS2000 is introduced (referred to as “Phase 1”) and to operate an overlying
management system are aggregated and organized as “CSR-related costs.” Aggregated
costs are divided into groups based on the area of activity and recorded in the “shared
items” cost column of the “CSR activity calculation form.” By running this type of
system, it becomes possible to identify CSR activities within the scope of corporate
activities as well as define which stakeholders are affected by those activities.
In the stage that involves the continuous operation and improvement of the ethics and
legal compliance management system (referred to as “Phase 2”), the company’s own
CSR activities and objectives and the relationship with stakeholders become clear.
When this happens, it becomes possible to better identify and analyze the fields
pertaining to the company’s CSR as well as, based on the company’s own perspective,
which efforts in those fields the company should actively pursue. Costs related to

voluntary activities that become apparent during this phase are recorded in the
“individual items” column of the activity-specific “CSR activity calculation form.”
2) Data Tabulation
“1)” provided an explanation for using the construction and operation of a CSR
management system to implement organizational structure restructuring and determine
the fields of CSR activities in which the company should be involved as well as using a
link between financial data and CSR accounting information to identify activity specific
cost data.
As the next step, the company aggregate and organizes the CSR activity specifically
identified cost data into a specific format. In these guidelines, the first step is to
aggregate and organize information using CSR activity-specific “CSR activity
calculation forms” in order to create basic materials for analysis and evaluation of the
appropriateness of CSR activities.
Tabulations on the CSR activity calculation forms follow a workflow of (1) dividing
CSR activity-specific costs into account titles and, (2) recording these costs as either
“shared items” or “individual items” depending on the elements of the specific cost.
(ⅰ) Planning (Plan)
In the “planning” phase, the company etc.’s formulates its fundamental policies
concerning ethics and legal compliance, and begins to work on the drafting of an
implementation plan to achieve established goals. Based on this, the company etc.’s
studies a code of conduct concerning compliance and compiles this into an ethics code
or compliance manual for the purpose of analyzing and controlling risks facing the
company.

When creating and revising an ethics code, one must organize points that the
company must work to comply with and enforce while keeping in mind the company’s
management philosophy and the risks of legal infractions. The first stage of starting
CSR activities involves outlining plans concerning education and training as well as
internal audits. Included in this stage is the implementation of more proactive plans for
improving the original system once activities are underway.
(ⅱ) Implementation and Operation (Do)
In order to solidify the content laid out in the drafted plan, this phase calls for the
establishment of a department in charge of ethics and legal compliance and the
assignment of substantial authority to that department. This department will be
dedicated to performing the following duties; management and revision of ethics
guidelines, implementation and review of planning, management of laws and other rules,
management and revision of internal regulations, implementation of education and
training, report and consultation, liaison with other relevant departments, and
communication with the ethics managers of various divisions and management levels.
Furthermore, this department will conduct education and training related to ethics and
compliance. In order for the department to be able to intake various internal and
external opinions and provide consultation and advice, the company must strengthen its
communication system. Also, consideration must be given to document management
and operational management.
(ⅲ) Monitoring (Check)
Auditing functions within the management system include “monitoring” and “ethics
and legal compliance management system audit.” Monitoring refers to daily checks
conducted on-site and at the various locations of business operations while the ethics

and legal compliance management system audit refers to the confirmation of whether or
not the ethics and legal compliance management system itself is in line with the
purposes of these standards as well as whether or not the system has been built and is
being maintained appropriately.
Monitoring activities include conducting self-checks and mutual checks as well as an

ethics and legal compliance management system audit by a dedicated department. If a
problem is discovered as a result of auditing activities, the company must conduct a
review of the problem. In these cases, if the problem can be corrected on the local level,
the measures should be instituted on-site. Methods for implementing monitoring should
be decided by the company, but generally these involve the use of checklists to ascertain
the state of compliance and status of progress.
Areas subject to monitoring include business activities that may have a serious effect
on society, issues about which a report or consultation was received from someone
within the company, and the status of compliance of relevant laws and other rules.
(ⅳ) Reevaluation (Act)
This phase addresses, large-scale measures that should not be left up to the judgment
of the individual departments and require approval from the management related to the
correction and substantial improvement of the whole management system,. First, the
company must evaluate a system that allows personnel responsible for management to
recognize and realize problems and present solutions. Here, priority must be designated
based on the level of impact represented by each issue and then evaluated measures
must be incorporated into the implementation plan for the upcoming fiscal year.

3) Data Analysis and Evaluation
Next, in order to ascertain the company’s level of involvement in and the progression
of CSR activities as well as clarify relationships to stakeholders, CSR activity
calculation form data is merged with income statement data and a stakeholder-specific
distribution calculation form is created and used to analyze and evaluate the amount
distributed to stakeholders and the ratio of each amount.
The most important aspect of this phase is to feedback the results of the analysis and
evaluations to business operations and to tie these efforts into actual improvements. In
other words, the company must clarify what CSR activities were undertaken during the
accounting period as well as whether or not those efforts resulted in the creation of an
ethical climate within the organization. It is important that information output from the
CSR accounting system be used as the foundation of plans for the creation of a
management system for the upcoming term and, by incorporating this data into CSR
strategy, tied into continuous improvements in future CSR management.
To effectively use the CSR accounting management function, CSR accounting

calculation forms must be applied toward the analysis and evaluation of CSR data. Here,
we will provide an example of the types of information that can be read from the
“income statement-inclusive calculation form” and the “stakeholder-specific
distribution calculation form.”
First, the following type of analysis can be made using data from the “income
statement-inclusive calculation form”. If a company conducts CSR activities for the
purpose of restructuring its organizational structure, the company will experience
significant costs in the initial stage of organizational restructuring. These costs are
generally allocated to the “sales and general administrative expenses (sales expenses)”
column on an income statement.
Further, if the company restructures its organizational structure through the reduction
of CSR risks, in the initial stage there is the possibility the company will incur heavy
costs to address penalties related to newly discovered compliance infractions, which

would cause costs recorded in the “extraordinary losses” column of the income
statement to increase.
Next, we look at a data analysis using the “stakeholder-specific distribution

calculation form”. The ratio of distribution of management resources to stakeholders is
determined by the company’s policies on CSR activities. As such, the company must
determine whether or not its actions toward specific stakeholders sufficiently reflect the
company's own policies.
This is carried out from a cost perspective using a period comparison of the data on
this calculation form. When performing a chronological analysis of data recorded on the
Stakeholder-specific distribution calculation form,” if fluctuations in data are
discovered, it is vital that the reasons for these changes be clarified. Here, the analysis
and evaluation of this data with CSR activity calculation form data will allow the
company to clarify these changes from a financial perspective.
4) Data Disclosure
Above, we provided an overview of how the operation of a linked CSR accounting

system is used to management a company’s CSR activities from a financial perspective.
It is clear that by conducting analysis and evaluation accounting to determine whether

or not a management system is functioning effectively, a company can ascertain the
effectiveness of its management system. Next, we must examine how this calculated
CSR information should be disclosed to stakeholders.
In terms of report details, the company must clarify the whole set of processes
involved in the CSR efforts considered and why the company chose specific CSR
activities.
By providing an easy-to-understand explanation of this process, the company will be

able to fulfill its CSR duties regarding disclosure as well as clarify its purpose of being
to stakeholders.

This concludes the overview of the process of introducing and operating a CSR
accounting system. The details provided here are processes recommended by these
guidelines. It is hoped that this manual will serve as a reference when carrying out the
actual process of introducing and operating a management system based on the policies
of the personal responsible for the actual practice of CSR accounting.

CSR Accounting Guidelines: R-BEC007

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Reitaku University Business Ethics & Compliance Research Center

Project: CSR Accounting Guidelines

Table of Contents ............................................................................................. 1

II. Meaning and Function of CSR Accounting .............................................18

III. Overview of CSR-Related Costs............................................................. 26

IV. Qualitative Characteristics of CSR Accounting Data .........................40

CSR Accounting Guidelines R-BEC007 Page 1

V. CSR Accounting Calculation Form System............................................49

VII. The Process of Introducing and Operating Systems for CSR

CSR Accounting Guidelines R-BEC007 Page 2

CSR Accounting Guidelines R-BEC007 Page 3

In order to simplify free use of R-BEC007 by many companies, evaluation agencies,

Accordingly, commercial distribution of R-BEC007, or any altered its versions, as a

CSR Accounting Guidelines R-BEC007 Page 4

“R-BEC0071 : CSR accounting guidelines” presented and proposed here are a

CSR Accounting Guidelines R-BEC007 Page 5

CSR Accounting Guidelines R-BEC007 Page 6

In this way, it is extremely difficult to accurately evaluate a company simply based on

In publishing R-BEC007, we kept the following in mind.

CSR Accounting Guidelines R-BEC007 Page 7

A major difference between R-BEC004 and R-BEC007 is that in R-BEC007 focus is

CSR accounting as detailed in these guidelines is viewed as a “means” to guide both

It is said “accounting is the sum of experience gained”. In creating this revised

CSR Accounting Guidelines R-BEC007 Page 8

December 27, 2007

CSR Accounting Guidelines R-BEC007 Page 9

Iwao Taka Professor at Reitaku University, Center head at R-bec

Tadashi Doi Professor at Reitaku University, Researcher at R-bec

Kazuhiro Bai Professor at Reitaku University, Researcher at R-bec

Kennichiro Yoshida Lecture at Reitaku University, Visiting Researcher at R-bec

Yasuhiro Yamaga Ferrow at R-bec

Kanae Teramoto Research Partner at R-bec

Takayuki Usuda Research Partner at R-bec

Yuka Shimizu Research Partner at R-bec

Yasuyo Zenjo Research Partner at R-bec

CSR Accounting Guidelines R-BEC007 Page 10

(1) Purpose of CSR Accounting Guidelines

With a goal of developing a CRS-based sustainable social system, these guidelines

The purpose of CSR accounting is to use methods founded on accounting principles

2. Refer to p.17 for a definition of CSR accounting.

CSR Accounting Guidelines R-BEC007 Page 11

(2) Characteristics of CSR Accounting

CSR accounting as outlined in these guidelines is meant to be a comprehensive

CSR Accounting Guidelines R-BEC007 Page 12

(3) Fundamental Approach to CSR Accounting Guidelines

1) Background of CSR Accounting Efforts

CSR Accounting Guidelines R-BEC007 Page 13

Accordingly, if accounting information output via CSR accounting can be developed

These guidelines propose a new scheme wherein a CSR accounting system is

CSR Accounting Guidelines R-BEC007 Page 14

2) Necessity of CSR Accounting and Merits of Implementation

Companies working to expand operations while being involved with a variety of

The disclosure of CSR accounting information is positioned as a vital means of

CSR Accounting Guidelines R-BEC007 Page 15

3) CSR Accounting Addressed in These Guidelines

Also, the type of information included in CSR accounting introduced in these

The structure of these guidelines is depicted by the flow shown in Fig. 1.

CSR Accounting Guidelines R-BEC007 Page 16

Ⅴ－1-1 Environment-Related Activity Calculation Form

Ⅰ－（1） Ⅰ－（2） Ⅰ－（3）

CSR Accounting Guidelines

Ⅴ－1-3 Product and Service-Liability Related Activity Calculation Form

Ⅴ－（2） Calculation Form Integrated with Income Statement

＜Ledger system＞＜CSR activity calculation form＞

Cost of create documents incurred for construction of the management system

Costs required to create a monitoring/audit plan concerning management activities

Costs required for the measures to review management problems