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   Criticism 1.   Vague definition -   Definition of asset and liabilities are rather vague and the recognition criteria are couched in terms of probability which is subjective. -   Recognition criterion fails to offer any guidance on the measurement problem, which is fundamental to accounting -   Definition is open-ended and it appears that any measure would be acceptable as long as the cost or value can be reliably measure 2.   Conceptual framework is intended as a fundamentally prescriptive project -   Aim is to provide guidance and prescriptions which is not based on observations of current practice to practicing accountants on how to account for information which is relevant for decision making 3.   Do not resolve contemporary disclosure issue -   For deferred tax credits, treatment of costs of exploration in the oil and gas industry and current value accounting -   Definition for liabilities is so general that we are unable to predict t he board’s position on deferred tax. What is the cost of mandatory reporting of social and environmental information? Social and environmental reporting is the dissemination of information on the interacting between the entity, society and the environment, including on performance and management. There are costs of mandatory reporting of social and environmental information. One of it will be the compliance costs that incurred if mandatory reporting is imposed . If company is required to report on social and environmental information, costs for resource allocation, pricing and remediation of social and environmental impact will incurred. Company will spend more money in dealing with the issues to ensure that their business did not breach any rules and regulations set by the government. Besides that, mandatory social and environmental reporting also runs the risk of adding costs whilst undermining efficiency and competitiveness of company . Introduction of different national level requirements and indicators will place a tremendous burden on company  that operates in an increasingly global business environment. Company may change their business practices  in accordance to the regulations rather than acting the best interest of the stakeholders which is to maximize their profit. Legitimacy theory also propose that entities with poor  environmental performance would more likely to produce greater levels or higher quality environmental information to address potential legitimacy threats. This would make the report not reliable as the company manipulate on how they disclose their social and environmental information. Would social and environmental information provide additional significant information for users of annual reports? Social and environmental reporting provides significant information on how company deals with social and environmental issue while carrying out their business practices to the users of annual reports. Annual reports users can be shareholders, customers, employees, creditors and financial analysts. Traditionally, while preparing annual report, company only focus on shareholders’ interest which is to maximize profit. But now, company considers a range of stakeholders in their decision making. One of it is that shareholders can consider sustainability issues of the company in their investment decisions. Shareholders are more likely to invest in a company that can sustain long term rather than company that only focus on how to make profit without considering on how their business practices impact on the environment. Presentation of the information on annual report enables shareholders to specify the influence of environmental and social aspects of business on performance and on financial position of the company as well as to access the future risk connected with these aspects. With these information provided by the company, shareholders are better informed and can be more decisive on whether to invest in the company or not. Social and environmental reporting also provides significant information to customers. Due to the recognition of climate change, customers nowadays are concerned about the environment and they are more interested in the source of products and actively seek for green and fair-trade products. Information provided by the company that shows how well they produce their product without harming the environment are more likely to attract customers to buy their products. It also provides greater information for creditors or banks. To decide whether to provide fund to the company or not, financial institutions need to consider the environmental impacts of project they fund in order to make sure that the company has the credibility and capabilities to deliver on its commitments.   
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