MFCA extension from a circular economy perspective: Model modifications and case study

As an innovative method of Environment Management Accounting (EMA), a model of Material Flow Cost Accounting (MFCA) is widely used in the field of cost calculation in the manufacturing process industry, and it has obtained a level of achievement in recent years. Based on the existing literature in the field, this report argues that the application of the current MFCA model in the process industry has defects, such as content restrictions, a single accounting index, simple methodology and one-sided conclusions, among others. This paper combines the current MFCA model with the "3R" principle of a circular economy (CE), and the industry characteristics of high consumption and pollution. The research focuses on the iron and steel industry as a representative of a process manufacturing industry and forms a modified MFCA model for an iron and steel enterprise according to the perspective of CE. The modifications we make to the model occur in the fields of model content, the accounting index, the methodology of application and the extension of functionality. Finally, through a specific case study, this report verifies the comprehensive utility of the proposed modified model. In general, the modified MFCA may, to a certain extent, be considered innovative in its approach to information and data connections, extension of methods and procedures, modes of disclosing information, construction of evaluation analysis and management of circular decision-making. Each of these elements is conducive to realizing a triple win situation for the conservation of resources/energy, providing an economic value-add, reducing the environmental load and enhancing the sustainable development of a resource-constrained process industry. (C) 2017 Elsevier Ltd. All rights reserved.