Create pollution should report the social cost of pollution

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Reference no: EM13864928

Some theorists contend that companies that create pollution should report the social cost of the pollution in their income statements. They argue that such companies are indirectly subsidized as the cost of pollution is borne by society while only production costs are shown on the income statement.

Assume you are on the FASB, and you are considering a standard to include the social costs of pollution in the income statement. Discuss the relevance and faithful representation of the information produced by the new standard.

Reference no: EM13864928

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