Social Accounting

The Company must behave and function as a responsible member of the society just like any other individual. It cannot shun moral values nor it can ignore actual compulsions. The real need is for some focus of accountability on the part of management not being limited to shareholders alone ..the objective of business ..proper utilization of resources for the benefit of others. Profit is necessary, but is not the primary objective ..The company must accept its obligation to be socially responsible and to work for the larger benefit of the community.

Definition of Social Accounting

According to G.C. Maheshwari, social accounting is identification, measurement, recording and reporting of corporate activities which may permit informed decision-making with respect to social activities of the firm having direct or indirect effect on the very fabric of the society at large, while social audit would mean enquiry into the corporate social accounting records by an outside agency that can opine with a view to attestation and authentication of such records and reports.

Social Responsibilities of Business

Social responsibilities of business as follows: Resources. It is the responsibility of business to use the various resources (i.e., materials, labour, capital, machines and management) employed by it in the best possible way and avoids wastage. wastage is anti-social in a developing country like India, so material , labour, capital should be used efficiently. Customers. Business has a very positive responsibility towards its customers. The main purpose of business is creation of demand. Business should provide the goods and services that the customers need at a price which they can afford.

(cont.) Employees. Owners and management of a business unit should not treat employees as a commodity which can be hired and fired at their will. Employees should be treated as human beings who have economic, psychological and social needs Government. Indian Government has set the objective of establishing a socialist pattern of society. The business can also help the Government by paying taxes honestly. Society. The business community is to help the government in social problems associated with industrial development. The business community can also help the society by constructing temples, schools, colleges, hospitals for spreading health knowledge and removing illiteracy.

Measurement of Social Cost Benefit

The following methods /criteria can be used for the measurement of social cost benefit are:

Capital Output Ratio: This ratio gives an idea of the expected output in relation to the capital invested in the project. This method of measurement is important in case of developing countries where there is shortage of capital resource. (capital/output) Value added Method: The term value added may be taken as follows: Sales Value - Cost of bought-out inputs (i.e., raw materials, components etc.) According to this method, a project having higher value added is preferred over a project having lower value added.

(cont) Employment Potential: This criterion of measurement of social cost benefit is important in country like India which has acute problem of unemployment. A project having higher employment potential is to be preferred over a project having lower employment potential. Saving in foreign exchange: According to this criterion, a project having higher potentiality in terms of foreign exchange benefits will get priority over a project having lower foreign exchange benefits. Social Cost Benefit Ratio: According to this method, a project having a lower cost benefit ratio is preferred over a project having a higher cost benefit ratio.

Dr

Cr

1. Shortfall of actual wage below the living wages. 2. Strains and stresses because of poor working conditions. 3. Strains and stresses because of injustice to workers. 4. Balance (cr) to the societys A/c.

1. Excess of wages the living wage. 2.Wage paid back in the form of direct and indirect taxes. 3. Development of human resource by acquiring skills. 4. Job satisfaction and happiness at work. 5. Social benefit due to the change in the attitude of labour force because of economic development 6. balance (Dr) to the societys A /c

1.Balance (Dr) from the Employees A/c. 2.Pollution of air , water or landscape in excess of permissible limits 3.Consequences of slums , filth , and congestion because of too much urbanization. 4.Harm caused by harmful products. 5.Service provided by the society free of cost such as education etc 6.Subsidy provided by the society represented by the excess of cost over prices charged for infrastructural facilities like roads , railways etc. 7.Balance (i.e., contribution to the society).

1.Balance (Cr) from the Employees A/c. 2.Net value added as a result of production in excess of remuneration of people working in the concern. 3.Development of new useful products. 4.Development of entrepreneurial ability. 5.Environment improvements. 6.Exess of rates over the cost of social services taken. 7.Expenditure on community development. 8.Social benefits of increased employment opportunities as a result of economic development. 9.Balance(i.e., contribution of the society to the business).

Social income statement

1.SOCIAL BENEFITS AND COSTS TO STAFF A. Social Benefits to Staff :           Medical and hospital facilities Education facilities Canteen facilities Recreation, entertainment and cultural activities Housing and township facilities Water supply, concessional electricity and transport Training and career development PF, gratuity, bonus, insurance benefits Holiday, leave encashment and leave travel benefits Other benefits Total benefits to staff

(cont) B. Social Costs to Staff: 1.Lay off and involuntary termination 2. Extra hours put in by officers voluntarily Total Costs to Staff Net Social income to Staff -1(A-B)

Social benefits and costs to community

Social benefits to community
1. 2. 3. 4. Local taxes paid to Panchayat/municipality implements Generation of job potential Generation of business

Total social benefits to community

B. Social costs to community

1. Increase in cost of living in the vicinity on account of the cement plants Net social income to community _(A-B)

III.SOCIAL BENEFITS AND COSTS TO GENERAL PUBLIC A. Social benefits to General Public 1. Taxes, Duties , etc . Paid to the state Governments 2. Taxes, duties, etc. paid to the central government Total benefits to general public B. Social Costs to General Public : 1. State services consumed-Electricity service 2. Central Services consumed-Telephone , Telegrams, Postal Services and banking Total Social costs to general public Net social benefits to general public III (A-B) NET SOCIAL INCOME TO STAFF, COMMUNITY AND GENERAL PUBLIC (I+II+III)

LIABILITIES
I. ORGANIZATION EQUITY

ASSETS
I. SOCIAL CAPITAL INVESTMENT
1.Township land 2.Building

(i)Township(residential and welfare building)

(ii) Canteen building 3. Township water 4 Township- Roads 5. Township Electrification

II. SOCIAL EQUITY Contribution by staff

II. OTHR SOCIAL ASSETS

1. Hospital Equipments 2. Hospital vehicle/ambulance 3. School equipments 4. Club equipments 5.Playground/Park 6. School Buses 7. Others

III.HUMAN ASSETS