Circular Economy and Financial Accounting

Aida Mosko – University “Fan S. Noli”, Faculty of Economy, Bulevardi “Rilindasit” 11, 7000, Korcë, Albania

Abstract: Financial accounting has an important role in managing finan­cial information in the circulating economy. The transition from a linear economy to a circular economy requires innovation in all parts of the life cycle of materials and various challenges related to proper and effective fi­nancial accounting. At the core of this economic model is the development of a sustainable process throughout the life cycle of products, from produc­tion to the final stage. Through finance and accounting, the business has the ability to keep track of its financial health and reliability and also drive the transaction towards the circular economy.

The accounting and reporting techniques designed for the linear economy are not the right ones to represent the value of circular businesses. Account­ing must analyse and report to all relevant stakeholders of a company on financial and non-financial performance and enable them to understand the value and impact of the circular economy. To achieve this goal, our cur­rent way of doing business must change, and accounting has a major role to play in that. This paper aims first to identify and analyse the main finan­cial accounting challenges related to the circular economy and also to draw attention to the importance of redefining value, impact and risk to advance the circular transition and expand business opportunities.

8th International Scientific Conference – EMAN 2024 – Economics and Management: How to Cope With Disrupted Times, Rome, Italy, March 21, 2024, CONFERENCE PROCEEDINGS, published by: Association of Economists and Managers of the Balkans, Belgrade, Serbia; ISBN 978-86-80194-83-7, ISSN 2683-4510, DOI: https://doi.org/10.31410/EMAN.2024

Creative Commons Non Commercial CC BY-NC: This article is distributed under the terms of the Creative Commons Attribution-Non-Commercial 4.0 License (https://creativecommons.org/licenses/by-nc/4.0/) which permits non-commercial use, reproduction and distribution of the work without further permission. 

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