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Social Accounting

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Updated Mar 2, 2026
Read Time 2 min

Social Accounting Meaning

Social Accounting refers to the information regarding the company’s production, consumption, expenditure, etc., and how it is fruitful to the overall social environment. All organizations must account for their social costs and benefit for sustainable development to achieve their goals.

Social Accounting

Types of Social Accounting

#1 – Environmental Accounting

It provides information about the impact on the natural environment. In other words, it can provide information regarding how an organization’s activity impacts land, soil, climate change, Air, change in water, reduction in natural resources such as coal, zinc, petrol, Gas, etc.

#2 – Sustainability Accounting

Also known as corporate social responsibility, it provides social and economic sustainability information.  It directly impacts society, the environment, and the economic performance of an organization. For example, using materials through the recycling process can help become more sustainable.

#3 – National Accounting

It refers to accounting techniques that analyze the economic activity of a nation. It analyses the total expenditure incurred by the country to perform a business activity. For example, a government has to record its spending on each project to avoid misuse.

Apart from the regular audit, they conduct special audits to know if there is any misuse of expenses.

Example

  • Corporate Social Responsibility like the construction of a hospital in their local area
  • The paper manufacturing sector uses waste paper to recycle the same to produce paper.
  • Manufacturing units are set up outside the local area because of the release of toxic air, harmful to both living and nonliving things.
  • Use of waste disposal techniques to avoid water pollution.

Benefits

  • It built trust in society through its transparency.
  • It is beyond financial reporting because it covers social impact.
  • It provides information to the government, people, society.
  • It helps achieve social objectives by providing transparent information.
  • It is also helpful in measuring social cost-benefit analysis.

Limitations

  • It is a notional cost, and therefore, non-monetary.
  • It does not impact on financial terms of financial reporting.

This has been a guide to Social Accounting and its meaning. Here we discuss its top 3 types and examples, benefits, and limitations. You can learn more about fixed income from the following articles –