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EMA allows an organisation to identify environment-related costs and take steps to control them. Such costs are often categorised into conventional costs, contingent costs and reputation costs. why hidden cost are not included?
I don’t know where you are quoting from, but hidden costs are mentioned in our Chapter 16 lecture and also in this article on the ACCA website:
Actually I quote from APM BPP workbook. The extracts from this book are as followed: “Managers have no incentive to reduce environment-related costs if they are not even aware of them.EMA allows an organisation to identify environment-related costs and take steps to control them. Such costs are often categorised into conventional costs, contingent costs and reputation costs.”. I want to ask why hidden cost are not included in environment-related costs?
I don’t know why BPP did not include hidden costs. Perhaps it is to do with the phrase “Managers have no incentive to reduce environment-related costs if they are not even aware of them”. I agree that you cannot control something if you do not know it exists, but for proper cost control you have to search diligently for all costs and you might find some that were hidden. Those ‘sneaky’ costs need to be controlled to.
I think the full, comprehensive list should be conventional, contingent, reputational and hidden costs.
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