Advertisements

Accounting for water


Image from wikipedia

Image from wikipedia

I have recently been involved in a research project on the newly formed Irish Water – a state-owned utility responsible for water supply in Ireland. The main objective of the new utility is to provide a unified approach to water supply – as opposed to the 30 odd previous authorities.  While the utility has caused much media attention, this post draws your attention to the use of accounting principles in the provision of water supply.

Let’s think about water as a resource,  which it is. Now think about the utility. It needs to account for the water it processes, distributes to customers and looses through leaks etc. To do this it needs various measuring devices such as meters. So, in a similar way to a ledger account, we could think as water coming into a system as a debit, water out a credit, the measurement is in litres (not money) and we should be able to account for the difference i.e. the balance on the account.

Now think about the end consumer of water. Similarly water comes in and out – the latter being usage. With meter installed, we can account for our usage, possibly trying to reduce usage. Or we can seek an alternative (partial) source of water by harvesting water from the roof of our house. By accounting for our usage, ultimately we can make decisions to reduce usage if we have to pay for the water resource. Without the ability to account for our usage (through a meter), we cannot make such decisions. This is of course more like management accounting – using our information on water usage to make decisions – but it is still accounting.

 

Advertisements

Tags: ,

About martinjquinn

I am an accounting academic, accountant and author based near Dublin, Ireland.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: