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Journal of Resources and Ecology >

2024 , Vol. 15 >Issue 1: 227 - 241

DOI: https://doi.org/10.5814/j.issn.1674-764x.2024.01.020

Natural Resources Report

The Framework of the Natural Resources Report—Improvements based on the Natural Resource Accounting Administration Demands of China

  • ZHANG Xinye , 1 ,
  • CHEN Yaru 1 ,
  • ZHANG Ning 1 ,
  • SONG Boyao 2 ,
  • MA Shangyu 3
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  • 1. Development Research Center, National Forestry and Grassland Administration, Beijing 100714, China
  • 2. School of Economics & Management, Beijing Forestry University, Beijing 100083, China
  • 3. Institute of Forestry and Grassland Survey and Planning, National Forestry and Grassland Administration, Beijing 100714, China

Received date: 2023-05-08

  Accepted date: 2023-08-06

  Online published: 2023-12-27

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Abstract

Based on the existing research on natural resource accounting, this study attempts to further enrich the administrative attributes of natural resource accounting. Through the analysis and comparison of previous publications, a mechanism for improving the construction of the natural resources report is proposed, with the dual aims of meeting the Chinese government’s supervision and audit demands in resource administration and overcoming the deficiencies of the Natural Resources Balance Sheet (NRBS) in scientific research and actual practice. By analyzing the influences of human factors on natural resources, the information structure and accounting contents of the natural resources report are given. The results demonstrate that the natural resource report system is reasonable and feasible in terms of its logical and theoretical basis. The framework of the system consists of four parts: the statement of the basic situation of natural resources, the statement of the protection and restoration of natural resources, the statement of resource use, and the statement of the degree of destruction of the natural resources. The results of this study provide reference statements for the NRBS, the natural resource quality statement, the protection and restoration policy statement, the protection and restoration funding statement, the natural disaster statement, and the registration form of resource destruction cases. This study provides a reference for the innovation of the natural resource administration system, in which the supervision and administration of natural resources are the main criteria.

Key words： Natural Resources Balance Sheet (NRBS); natural resource accounting; natural resources report

Cite this article

ZHANG Xinye , CHEN Yaru , ZHANG Ning , SONG Boyao , MA Shangyu . The Framework of the Natural Resources Report—Improvements based on the Natural Resource Accounting Administration Demands of China[J]. Journal of Resources and Ecology, 2024 , 15(1) : 227 -241 . DOI: 10.5814/j.issn.1674-764x.2024.01.020

1 Introduction

With the rapid development of the modern social economy, the excessive use of natural resources has a great negative impact on the ecological environment. The traditional gross domestic product (GDP), as the most widely used core aggregate index under the System of National Economic Accounts (SNA), overemphasizes the “positive effect” in the process of economic activities while ignoring the “negative effect” (Gao, 2013), which inevitably leads to the overestimation of the national economic output by the GDP. To alleviate the deficiencies of economic accounting in resources, the United Nations put forward the economic and environmental accounting system at the World Conference on Environment and Development in 1990, which incorporated environmental accounting into the national economic accounting. In 1993, the United Nations published the interim version of the System of Environmental Economic Accounting System (SEEA-1993) in the form of 93 SNA satellite accounts; and it also formally put forward the concept of green GDP for the first time, which included natural environmental factors in the production accounting of the national economy (Shen et al., 2017).
The acceleration of China’s economic growth in recent years has also led to numerous environmental problems, causing the economic development process in China to fall into the quagmire of “the larger the GDP, the more serious the destruction of resources and environment”. To change the local government behavior of sacrificing ecological resources in the pursuit of higher GDP, China has made a bold attempt in the field of natural resource accounting. In 2013, China proposed the compilation of a Natural Resources Balance Sheet (NRBS) for the first time. The proposal pointed out that the NRBS should be compiled to conduct off-office auditing of leading officials in terms of natural resource assets, establish a lifelong liability system for ecological and environmental damages, and realize the innovation and optimization in terms of China’s natural resource administration system. Many hoped that the construction of innovative mechanisms such as the NRBS would make it possible to ascertain the actual situation of natural resources and implement and assess the performance of leading cadres regarding their responsibilities in natural resource administration. Combined with the research results of the international natural resource accounting theory, Chinese scholars conducted in-depth research on the theories, statements, and framework of the natural resource balance sheet by referring to SEEA-2012, and have realized some phased achievements. In 2015, the pilot projects of the NRBS were carried out in Hulunbuir of Inner Mongolia, Yan’an of Shaanxi, Loudi of Hunan, Huzhou of Zhejiang, and Chishui of Guizhou. With the advancement of relevant research and practice, some remaining problems in the theoretical research and practical operation of China’s natural resource accounting have been exposed. This study reviews the differences between China and other countries in terms of the administrative demands of natural resource accounting and puts forward some ideas for improvements and specific plans to overcome the problems caused by the differences.

2 Development and evolution of resource accounting theory and practice

The research topic of this study, i.e., the natural resources report, is based on related research of the Chinese government in the field of the NRBS. The two key research questions are: How was the NRBS put forward? and what was the relationship between it and the System of Environmental-Economic Accounting (SEEA)?

2.1 Historical evolution of the NRBS

2.1.1 Resource and environmental accounting

Resource and environmental accounting originated in the late 20th century, and it is the product of combining accounting theories with environmental and resource issues. Liang and Yang (2002) pointed out that under the strategy of sustainable development, resource and environmental accounting, as a branch of accounting, must be combined with environmental science, environmental economics, and other disciplines. Those authors defined resource and environmental accounting as follows: It should take sustainable development as the goal, use the basic theories and methods of accounting, and adopt a variety of measurement methods and attributes to confirm, measure, record, and report the environmental administration system of accounting subjects and the influences of economic activities on the environment. International environmental accounting includes the micro- and the macro-perspectives. At the micro-perspective, international environmental accounting considers the enterprise as the main body; whereas at the macro-perspective, the governments at all levels are viewed as the main body for reflection, accounting, and supervision.
Some studies by scientists in the United States are empirical studies, and they are mainly from a micro-perspective. These studies primarily investigated the economic consequences caused by environmental issues and relevant information disclosures from an economic or financial perspective, but they did not discuss the measurement of the environmental asset value in the national accounting system from an accounting perspective (Al-Tuwaijri et al., 2004; Jose and Lee, 2007). The current trend in the development of environmental accounting theory shows that the main body of the theoretical research is gradually shifting from micro-subjects represented by enterprises to macro-subjects represented by the governments at all levels, and the environmental accounting theory is beginning to pay attention to natural resources and the economic environment. Some studies measure a country’s natural resource consumption in terms of the physical and value levels of natural resources. In practice, Kassai et al. (2012) used basic accounting principles to measure and classify natural resources into environmental assets, liabilities, and rights and interests; and they employed resource data from seven countries, such as the United States, Japan, Germany, and China, to evaluate the ecological and economic benefits of the resources. Obst and Vardon (2017) analyzed accounting standards relating to the land, energy, and water accounts prepared by the Australian Bureau of Statistics, and identified the importance of compiling accounting statements to report the changes in the stocks and flows of natural resources. McGrath and Hynes (2020) proposed that natural resource accounting should be linked with political decision-making to enrich GDP accounting indicators and improve natural resource governance.

2.1.2 System of environmental-economic accounting (SEEA)

Since the end of the last century, many international organizations and countries have been actively trying to incorporate resources and environmental factors into the national economic accounting system. On this basis, the statistics and accounting of natural resources in terms of physical and value quantities have been widely conducted. For example, Norway took the lead in accounting environmental resources in 1978, and established accounting accounts for forest, mineral, land, and water resources. Finland focused on forest resources, environmental protection expenditure, and ecosystems, and carried out accounting studies on the environmental value (Xu, 2012). Subsequently, the European Union drew on the practical experiences of Norway and Finland and proposed the National Accounting Matrix including Environmental Accounts (NAMEA). The United States and the United Kingdom have added other contents, such as oil and minerals, to their resource account settings (Kong et al., 2016).
Among these practical activities of natural resource accounting, the most representative is the System of Environmental Economic Accounting (SEEA). In the 1990s, the United Nations published the SEEA-1993. On the one hand, the consistency of the core accounting structure between SNA and SEEA is ensured, which is conducive to the continuity of SNA-related studies. On the other hand, SEEA is not mandatory, so different countries can determine their specific accounting contents according to the SEEA and their actual situations, which means a large research space (Cen, 2013). For example, Warnell et al. (2020) used the SEEA-2012 framework to calculate the values of the ecosystems of the 10 southeastern states in the United States, providing reference for future ecosystem accounting research. Vardon et al. (2018) described how SEEA improved decision-making information systems and data quality, and provided lessons and experiences for the development of shared environmental information systems in Europe. Ruijs et al. (2019) proposed six strategies for improving the environmental accounting of natural resources.
It is worth noting that SEEA not only includes the accounting content of a green GDP but also standardizes the statistical standards and evaluation methods for natural resources and the environment. After continuous revisions and improvements, the SEEA system was updated with multiple versions of SEEA-2000, SEEA-2003, and SEEA-2012. Since SEEA-2012 is recognized as an international statistical standard, various countries have explored accounting systems suitable for their national conditions based on SEEA-2012. For example, Australia revised the Australian Environmental Economic Accounts (AEEA) by referring to SEEA-2012. Canada updated the Concepts, Sources, and Methods of the Canadian System of Environmental Resource Accounting (CSERA) in accordance with SEEA- 2012, and explored the construction of an ecosystem account by referring to the SEEA Experimental Ecosystem Accounting (SEEA-EEA) (Xing et al., 2022). Drawing on the SEEA-EEA system, the Netherlands established a national ecosystem accounting system (Hein et al., 2020).
There are two basic forms of accounting for natural resource assets in the SEEA-2012, i.e., physical and value accounts. In practice, the basic data of the physical quantity can easily be obtained and counted, whereas the calculation of the value quantity is still one of the difficulties in natural resource accounting. Because of this challenge, people have reached a basic consensus on the methods of natural resource accounting, that is, the physical quantities should be calculated first, followed by the value quantities. The SEEA-2012 recommends valuation methods for value quantity accounting, including the market price method, the write-down replacement cost method, and the net present value method. The different valuation methods have their own adaptability characteristics and limitations. In addition to the accounting methods recommended by SEEA-2012, the academic community also proposed the ecological footprint method, the energy-currency value method, life cycle assessment (LCA), and the economic valuation method (Yu et al., 2019). In practice, individual countries can choose the most appropriate evaluation methods according to their research objectives and data availability. Moreover, more and more countries are establishing a natural capital account (NCA) based on SEEA.

2.1.3 National Resources Balance Sheet (NRBS)

From the perspective of administrative functions and objectives, the NRBS represents the exploration and attempt of the Chinese government in macro-resource accounting. It was first proposed in 2013 at the Third Plenary Session of the 18th CPC Central Committee, with the stated goal of exploring the compilation of the NRBS to conduct the off-office auditing of leading officials in terms of natural resource assets and establish a lifelong liability system for ecological and environmental damages. This was a new attempt in the field of natural resource accounting in China. In addition, to ascertain the actual situation of China regarding natural resources and determine the information needs of the current situation of physical and value quantities of natural resources, the administrative demands of supervision, assessment, and service decision-making were also added, which were linked to the off-office auditing of leading cadres, thus effectively curbing the leadership behavior of sacrificing resources in the pursuit of greater GDP.
The definition of NRBS can be summarized into two main categories. The first category, represented by Geng et al. (2015), Hu (2014), Gu (2016), and Sheng and Yao (2017), emphasizes that the NRBS should be a statement that can accurately reflect the physical and value quantities, as well as the stocks and flows of resources. The second category, represented by Chen et al. (2015), Chen and Huang (2014), and Feng et al. (2014), is based on the assumption that the NRBS reflects the status of natural resources and even the status of the environment at a certain point in time. The NRBS should reflect not only the quantity of resources but also the quality of resources, and even their destruction and use situations.
The determination of the concept system of the NRBS integrates multiple disciplines, including resource science, ecology, and enterprise accounting. There are no significant controversies about the concept of assets, and most experts define natural resource assets as the total amount of existing resources and their corresponding direct and indirect values. However, there are large divergences in the definitions of liabilities and net assets.
At present, there are several mainstream views on natural resource liabilities in China. The first is the cost theory. Cai and Bi (2014), Zhang et al. (2014), and Wang and Cheng (2014) believed that natural resources liability refers to the protection and restoration costs paid by a specific subject to manage the ecological environment. The second is the theory of no liabilities. Starting from the theory of business accounting, Geng et al. (2015) stated that there are no lending relationships between natural resources, making it impossible and unnecessary to confirm the natural resource liabilities. The third is the theory of excessive consumption. Gao (2016) regarded the excessive consumption of resources as liabilities, whilst normal consumption and reduction of resources were not considered as liabilities. The fourth is the theory of resource reduction. Chen et al. (2015) advocated that the consumption and reduction of resources should be regarded as liabilities.
Some experts argue that the business accounting identity “Assets = Liabilities + Net assets” cannot be directly applied in the field of resource accounting (Zhang, 2018). Considering the objective law of “Opening stock + Interim increment ‒ Interim decrement = Ending stock” for the physical quantity of natural resources, those authors proposed supplementing the element of the “liability offset item”. The interim decrement was defined as the liability, and the interim increment was defined as the liability offset item. Thus, the equation becomes the relationship of “Resources assets + Liability offset item ‒ Liabilities = Net assets”.
The research achievements of some Chinese experts in the theories, compilation, and applications of the NRBS are mainly based on SEEA-2012 (Shi and Wang, 2020). Early in the proposal of the NRBS, experts made many new attempts to design statement forms and a framework for SEEA-2012. For example, Huang and Zhao (2015) designed the framework of the NRBS in three levels: the first is the physical quantity sheet of resources, the second is the special accounting sheet of liabilities, and the third is the balance sheet of natural resources. Based on SEEA-2012, Hu (2014) proposed that the framework system of the NRBS should include five parts: asset sheet of natural resources, liability sheet of natural resources, balance sheet of natural resources, notes to the NRBS, and government administrative status of natural resources. Gao (2016) divided the framework of the NRBS into three parts: accounting statement of the natural resources entity, accounting statement of the natural resources management rights, and accounting statement of the natural resources exploitation rights. It should be emphasized that this framework does not include the accounting of the value quantity. Deng and Gao (2020) proposed that the statement of the accounting system of natural resource assets and liabilities should include a summary statement, main statement, supporting statement, detailed statement, and quality accounting table; and that the accounting of natural resources assets and liabilities should be carried out from three aspects: physical quantity, value quantity, and natural resources quality. In terms of value quantity accounting, the NRBS mainly refers to the accounting method of SEEA-2012.
The framework of the NRBS currently being piloted by the Chinese government (as shown in Fig. 1) mainly involves land, forest, and water resources. There are statistical tables of the physical quantities of resource assets and statements of resource quality, but the value quantities and liabilities are not included. The main reason is that the data are reported by the government level-by-level, without additional technical and financial support. Furthermore, the workload of the natural resource value quantity accounting is huge, the professionalism of accounting is strong, and the statistical difficulty is great, which greatly limits the implementation of the NRBS that is currently being piloted by the Chinese government.
Fig. 1 The framework of the NRBS currently being piloted by the Chinese government

2.2 Comments on the literature

2.2.1 Differences between SEEA and NRBS in terms of administration demands

Although the NRBS refers to SEEA-2012 in both structure and content, the NRBS and SEEA-2012 have different emphases from the perspective of administration objectives and demands. The SEEA focuses on value quantity accounting and how accounting data can be applied to the economic field in order to fill the gaps in economic statistics. The NRBS focuses on whether the information in the tables can have supervisory and administrative functions in the off-office auditing of natural resource assets. The Chinese government hopes that the statistical data of the NRBS can reflect the behaviors of local government leaders regarding resource issues, which can be used as an important criterion to evaluate their off-office auditing. The differences between the NRBS and SEEA-2012 with respect to administrative objectives determine their differences in information demands.

2.2.2 Contribution of the NRBS to natural resource accounting

In addition to the information system attribute of accounting, the NRBS has expanded the supervision and auditing attributes of natural resource accounting. The Chinese government has great expectations for the NRBS in the administration of natural resources. Simple calculations of the economic value of natural resources can no longer meet the demands of the Chinese government in natural resource administration. Due to the very large Chinese population, the current state of the ecological environment is critical. Therefore, a few urgent demands of the Chinese government are protecting natural resources, adhering to green development, and effectively managing and restraining the excessive use of resources. Hence, the Chinese government hopes to optimize China’s natural resource administration system and establish an administration and supervision mechanism via the NRBS, thus effectively curbing the tendency of local government leaders to excessively pursue economic development while ignoring the protection of the ecological environment. At present, China is constantly studying and applying the NRBS in the administration of natural resources, and there is a meaningful attempt internationally for natural resource accounting to play a greater role in the field of resource administration.

2.2.3 Problems of the NRBS

Although the NRBS pilot period has yielded some phased achievements, this reform has not been popularized primarily because of some constraints in the early pilot work.
The first problem is that the current NRBS data are not sufficient to support the administrative demands and cannot play an effective role in the off-office auditing of resources of the leading cadres due to fluctuations in the quantitative aspects of resources. First, the reasons for the increases or decreases in the physical quantities of resources are highly complex. For example, a decrease in water resources may be affected by the natural climate, whereas a change in the physical quantity of forest resources is a long-term process, which often spans the tenures of several leaders. Second, the value quantity is greatly affected by the economy, policy, and market price in China, so any reductions in the value quantity cannot be directly linked to the behaviors of the leading cadres.
The second problem is that the conceptual structure of the NRBS is insufficient to support the required administrative information. The theoretical scope of the balance sheet concept has some limitations. For example, information such as the quality of resources, the protection and restoration status of resources, and the ecological protection and restoration cost is of great statistical value for supervision and assessment, but the corresponding concepts are not involved in the balance sheet. In view of this problem, expanding the information content will require optimizing the information structure and straightening out the logical relationships of the information statistics.

3 Theoretical and logical basis of the natural resources report

To solve the problems arising from the theory and practice of the NRBS and to better meet the demands of the Chinese government in the supervision and assessment of natural resource administration, this paper proposes to construct and compile a natural resources reporting system. Its theoretical basis and structure refer to the financial reports (i.e., balance sheet, income statement, cash flow statement, and owners’ equity statement) in business accounting. Like the accounting demands of financial reports, the natural resources report is a carrier reflecting all the information of natural resources. It not only reflects the performance of the responsible subjects but also provides the basis for top-level decision-making and the auditing of the outgoing leading cadres, thus meeting the management demands of Chinese government agencies for natural resources. Unlike business accounting, which takes capital as the statistical object, the statistical objects of the natural resources report mainly include the quantity, quality, and price of resources, as well as the protection, restoration, use, and destruction of resources. All the information involved in the context of resources requires a reasonable accounting model for recording in order to achieve the dual purposes of recording the information and reflecting the information.

3.1 Theoretical basis of the natural resource report system

3.1.1 Accounting information system theory

The accounting information system theory was first proposed in 1953. The American accountant Littleton pointed out that “accounting is a special kind of information service”. In 1966, the American Accounting Association made it clear that “accounting is essentially an information system”. Since then, accounting information system theory has been widely implemented and recognized. The theory of an accounting information system explains the problem of “what is the natural resources reporting system” in theory. Fundamentally, the natural resource report system is the carrier of natural resource information. For the NRBS or the report system of natural resources, although the form of information has changed, the essence remains the same. This provides a theoretical basis for optimizing the NRBS into the natural resource report system.

3.1.2 Accounting management activity theory

The main content of the accounting management activity theory is defining the essence of accounting as an economic management activity. The accounting management activity theory is a continuation of the accounting management instrumentalism. This concept has existed in the western management theory school of thought for a long time. In the “classical management theory” represented by Fayol, the accounting activity is included in the six functional activities. In 1980, Chinese professor Yang Jiwan first proposed that “Accounting itself has the management function from both the theoretical and practical perspectives”. The accounting management activity theory theoretically answers the question of “what is the function of the natural resources report system?” Its essence is an important link in the construction of the natural resource management mechanism in the process of ecological civilization construction. It is a concrete measure for supervising and managing resources based on the auditing of outgoing leading cadres.

3.1.3 Natural resource accounting theory

Natural resource accounting theory is another important branch of environmental resource research. Although the framework, accounting elements, and theoretical completeness of natural resource accounting still need to be further studied, it provides a theoretical basis and support for natural resource reports. Based on the characteristics of natural resources, the environmental accounting theory emphasizes the scarcity, limitation, and value of resources. In addition, it identifies, measures, and manages the price and value of resources from an accounting perspective, which provides useful information for decision-making (Gray and Bebbington, 2001; Galos et al., 2015) introduced accounting elements, accounting systems, accounting principles, and measurement attributes into natural resource accounting. The current development trend of the environmental accounting theory shows that the main body of the theoretical research is gradually changing from micro-subjects, represented by enterprises, to macro-subjects, represented by the government.

3.2 Logical basis of the natural resource report system

3.2.1 Rationality of the natural resource report system： Perfecting the concept of the system

The construction of the natural resource report system conforms to the theoretical paradigm of natural resource accounting. It provides a more inclusive information carrier for the information statistics of natural resource accounting at the theoretical level and makes up for the shortage of the narrow conceptual scope of the NRBS. It provides space and a foundation for further enriching and improving the information system of resource and environmental accounting in the future and explains the logical relationships among the NRBS, the resource asset value accounting statement, and the resource quality statement in natural resource accounting. In other words, those three have coordinating rather than inclusive relations. This conforms better with the demands of the Chinese government in natural resource administration.

3.2.2 Feasibility of the natural resource report system: Optimizing the frame structure

The NRBS can be augmented as a natural resources report. By subtracting them from the original complex NRBS, the contents unrelated to assets and liabilities, such as the natural resource quality statement, are removed so that the balance sheet can mainly reflect the actual physical quantity of resources. By adding them to the natural resource report system, the contents unrelated to assets and liabilities but related to natural resources, such as the resource value accounting statement and the quality statement, are tabulated independently and coordinated with the NRBS, thereby constituting the natural resource report system. During the off-office auditing of resources of the leading cadres, some statements in the statement system of natural resources can be selected for auditing.

3.2.3 Practicality of the natural resource report system： Enriching the statistical information

The information that can reflect the status of natural resources, such as their use, protection and restoration, governance costs of natural resources, and the destruction of resources, can be integrated into the report system of natural resources. Such information can reflect the subject’s supervision and management, capital investment, and protection and restoration measures, which are closely related to the local government’s behaviors towards natural resources. Moreover, such information is more objective and persuasive in terms of supervision and assessment. Overall, the integration of related information can not only promote better connections between the natural resource report system and the off-office auditing of the natural resources of leading cadres but it also provides an information basis for green GDP accounting and national balance sheet compilation, in order to achieve common integration.

4 Construction of the natural resource report system

The construction of the natural resource report system mainly involves two core contents. First, what kind of information can objectively evaluate the administrative behaviors of leading cadres regarding natural resources? Second, how can the content of information be screened and determined, how can the information be effectively classified and how can the logical relationships of the information be sorted?

4.1 Information selection principles of the natural resource report system

The natural resource report system is a comprehensive information report file provided by the responsible parties. It can fully reflect the basic status of natural resources, the protection and restoration of natural resources, the use of natural resources, and the damage to natural resources caused by natural disasters and human activities within the specified scope and time period. The selection of the information content and the determination of the information structure shall comply with three principles.
(1) Scientific validity. The content of the information structure should be scientifically sound and reasonable, and in line with the theoretical requirements of natural resource accounting, thus ensuring the reliability and authority of the data.
(2) Operability. As a government statistical document, information statistics should be highly operable, and the difficulty in data acquisition and report filling should be within a manageable range.
(3) Objectivity. The information should objectively reflect the influences of human factors on natural resources so that it can be more convincing in the application of information achievements, thereby improving the transformation of the information results.

4.2 Analysis of the interactions between humans and natural resources

The selection of the information content contained in the natural resources report starts from an analysis of the interactions between humans and natural resources. Human influences on natural resources can be summarized into three kinds of behaviors, which are (sequentially) survival demand, profit-seeking behavior, and protection behavior. These three behavior levels are constantly progressing along with the development of human civilization and directly influence the quantity, value, and quality of natural resources. These influences can be divided into positive and negative influences according to their results. Protection behavior and green development behavior can have positive influences on resources. Through the protection and restoration of natural resources and the value realization of ecological products, the physical quantity and quality of natural resources can be improved. By contrast, the survival demand, excessive use, and destruction behaviors have negative influences, leading to reductions in the physical quantity and quality of natural resources. In turn, the natural environment can have positive influences on economic benefits and negative influences on natural disasters according to human behaviors. The interactions between humans and natural resources are illustrated in Fig. 2.
Fig. 2 Schematic diagram of the interactions between humans and nature resources
Based on this scheme, the two kinds of positive behavior and two kinds of negative behavior of humans toward natural resources have an important reference value. These four kinds of behavior are inseparable from the government’s administrative measures. For example, the protection, restoration and green development of natural resources require financial investment and policy encouragement, whereas the use, overuse and destruction of resources require that the government designates laws and regulations, and implements supervision and administration. China adheres to sustainable development and strengthens its ecological progress. On the one hand, China relies on policy support, financial investment, industrial transformation, and other measures to enhance the positive influences; but on the other hand, it relies on strict supervision and administration as well as laws and regulations to curb the negative influences. As a result, a virtuous cycle of rational use and appropriate protection and restoration of natural resources can be built, thereby achieving a balanced state of sustainable development. Thus, based on this analysis, we can obtain the structural framework and logical relationship of the natural resources report.

4.3 Structure and content of the natural resources report

The overall framework of the natural resources report refers to the financial report of accounting and combines the characteristics of natural resources. According to the information required, the natural resources report has four parts: the basic status of natural resources, the protection and restoration of natural resources, the use of natural resources, and the disasters and destruction of natural resources. The natural resources report can fully integrate the physical quantity, value quantity, and quality of natural resources, the protection and restoration costs, the government’s efforts, the benefits from rational resource use, and the destruction of resources; and it can comprehensively reflect the interactions between humans and natural resources and the relationships among them. Figure 3 shows the structure of the natural resources report. The scope of resources included in the report system follows the 3+X mode, that is, local unique resources such as grasslands, oceans, and minerals are added, in addition to land, water, and forest resources.
Fig. 3 The structure of the natural resources report

4.3.1 Basic situation statements of natural resources

The first part of the natural resources report is the basic situation statement, and it is the most fundamental part of the natural resources report. The basic situation statement includes the NRBS, the accounting statement of the natural resource value, and the statement of changes in the natural resource quality, which serve to ascertain the actual situation of the natural resources and clearly reflect the physical quantity, value quantity, and quality of resources.
(1) Natural resources balance sheet
The NRBS mainly describes, supervises, and reflects the changes in the physical quantity of natural resources in a certain period. It considers the objective law of “Opening stock + Interim increment ‒ Interim decrement = Ending stock” for the physical quantity of natural resources. The opening stock of resources is defined as resource assets, the interim decrement of resources is defined as the liability, the interim increment of resources is defined as the liability offset item, and the ending stock of resources is defined as net assets. Thus, the equation relationship is: “Resources assets + Liability offset item ‒ Liabilities = Net assets.”
The following environmental resource accounting equation can be obtained:
A = C-D+R
where A is resource net assets; C is resource assets; D is resource liabilities; and R is resource liability offset.
The NRBS can be divided into three sub-sheets, that is, the land balance sheet (Table 1), the water resource balance sheet (Table 2), and the forest resource balance sheet (Table 3). According to the resource accounting equation relationship and the accounting balance principles, the left and right sides of the balance sheet must be balanced. Here, the main data source of the NRBS is the national resource inventory of China.
Table 1 Natural resource balance sheet (land) (Unit: ha)
Assets Value Liabilities Value
Cultivated land Construction occupation
Garden land Disaster destruction
Forest land Illegal occupation
Grassland Everything else
Urban village and industrial land
Transport land Net assets
Waters and water conservancy
facility land		 Cultivated land
Other land Garden land
Forest land
Liability offset Grassland
Comprehensive land management Urban village and industrial land
Agricultural structural adjustment Transport land
Cropland conversion Waters and water conservancy facility land
Everything else Other land
Total

Note: The totals for the second and fourth columns are equal. The table is designed for the account of natural resource information statistics, thus some fields remain unpopulated. The same below.

Table 2 Natural resource balance sheet (forest) (Unit: 103 m3)
Assets Value Liabilities Value
Natural forest Logging
Non-commercial forest Deforestation
Commercial forest Disaster losses
Planted forest Natural reductions
Non-commercial forest Everything else
Commercial forest Net assets
Bamboo grove Natural forest
Non-commercial forest
Liability offset Commercial forest
Forestation Planted forest
Grain for green Non-commercial forest
Natural growth Commercial forest
Everything else Bamboo grove
Total
Table 3 Natural resource balance sheet (water resources) (Unit: 104 m3)
Assets Value Liabilities Value
Surface water Water intake
Reservoirs Living water
Lakes Industrial water
Rivers Agricultural water
Ground water Off-river ecological water
Flow out
Liability offset Flow outside the area
Inflow of water resources formed by precipitation Flow to the sea
Inflow from outside the area Call out of the area
Call in from outside the
region		 Ecological water consumption of rivers and lakes
Inflow from other water sources in the region
Return amount of economic and social water Net assets
Return amount of irrigation water Surface water
Amount of waste water
entering the river		 Reservoirs
River inflow after treatment Lakes
Rivers
Ground water
Total
As shown in Table 1, the classification of land resources refers to the Classification of the Land Use Status (GB/T2 1010-2007). Liability offset includes the increments of various types of land resources and the corresponding specific reasons. Liabilities include the decrements of various types of land resources and the corresponding specific reasons.
Note that the total amount of land resources is conserved. Hence, the changes in various types of land resources are offset from each other. For example, the conversion of cultivated land to forest simultaneously causes a reduction in cultivated land and the same increase in forest land. Regarding the changes in land resources, the increases in forest land, grassland, and water areas improve the ecological environment, and they are therefore taken as the liability offset. In contrast, cultivated land, gardens, and construction land represent the occupation of natural land resources, and the increases in these land resource types inevitably lead to reductions in the ecological land. Consequently, an increase in construction land belongs to the content of the liability statistics.
Table 2 shows the balance sheet of forest resources. To acquire better data through forest resource inventories, the classification of forest resources refers to the definition in the “Technical Regulations on the Continuous Inventory of National Forest Resources”. The liability offset includes the growth of forest resources due to various causes, and the liabilities include the reduction of forest resources. These two sides of the balance sheet are conserved.
It should be emphasized that the asset changes in grassland resources have become a new field for the protection and restoration of natural resources after the institutional reform in China. As the current statistical indicator of grassland is mainly the grassland area, grassland resources are classified as land resources for the compilation of the balance sheet and will not be compiled separately.
Table 3 shows the balance sheet of water resources. Water resource assets are divided into surface water and groundwater. The liability offset includes the increases in the water amount due to various causes, whereas liabilities include the reduction in the water amount. The two sides of the balance sheet are conserved.
(2) Accounting statement of the value of natural resources
The accounting statement of the natural resource value can be designed by referring to the accounting method and account design of SEEA-2012 for further exploration and innovation. According to the characteristics of resource types, the accounting methods include the direct market method, the indirect market method, and other methods; while the design of the accounts for resource value accounting can directly adopt the monetary unit, and the accounting of physical quantities is based on the NRBS.
However, the basic data required for the accounting of the value of natural resources are complex. Hence, value accounting should be based on the specific conditions of various resources and supported by professional personnel of the specialized research institutions or colleges and universities, as well as special funds for carrying out specific research and accounting. The accounting results and statements are included in the resource situation statement system, but they are not used in the off-office auditing of leading cadres.
(3) Quality statement
The quality statement of natural resources records the changes in natural resource quality in a specific period according to industry standards, which can effectively reflect the protection and restoration of natural resources. The quality of forest land, grassland, and wetland can be demonstrated by the quality of forest, grassland, and water resources, respectively. Other indicators are the human factors interfering with land use, so their quality explanations are not included. For the quality of forest resources (Table 4), the unit area stock of artificial forests and the unit area stock of natural forests are selected as the measurement standards.
Table 4 The quality of forest resources (Unit: 103 m3)
Quality evaluation indicator Opening balance Increase Decrease Ending balance
Stock per unit area of planted forest
Stock per unit area of natural forest
Total
The quality of water resources (Table 5) is measured according to the “Surface Water Environmental Quality Standards” (GB3838-2002) and “Groundwater Quality Standards” (GB/T14848-93). The water resource quality can be divided into five levels: Class Ⅰ, Class Ⅱ, Class Ⅲ, Class Ⅳ, and Class Ⅴ.
Table 5 The quality of water resources
Quality
evaluation
indicators		 Reservoirs Lakes Rivers Underground
water
Opening Ending Opening Ending Opening Ending Opening Ending
ClassⅠ
Class Ⅱ
Class Ⅲ
Class Ⅳ
Class Ⅴ
Lower Class Ⅴ
By comparing the levels of water resources at the beginning and the end of the period, the effects of water resource protection and restoration can be obtained.
The quality of grassland resources (Table 6) is described by referring to the relevant indicators of grassland detection across China. The state of grassland resources is taken as the main measurement standard, and the protection and restoration of grassland ecology is reflected through plant species, vegetation height, vegetation coverage, and aboveground biomass.
Table 6 The quality of grassland resources
Quality evaluation indicator Opening balance Increase Decrease Ending balance
Grassland vegetation types
Grassland vegetation height
Grassland vegetation coverage
Aboveground biomass

4.3.2 Resource protection and restoration statement

The second part of the report consists of a statement on the protection and restoration policies for natural resources (Table 7), a statement of the funds for the protection and restoration of natural resources (Table 8), and a statement on the protection and restoration achievements related to natural resources (Table 9). The introduction of natural resource protection and restoration policies into the natural resource report system can directly reflect the degree of emphasis by local governments and leaders on resource protection and can reflect the efforts and contributions made by local governments in terms of natural resource protection and ecological environmental restoration through various related indicators.
Table 7 Statement of the protection and restoration policies for natural resources
Resource category Policy name Policy release department Date of issue Policy category Subsidy standard Source of funds Way of using funds
Land resources
Water resources
Forest resources
Everything else (Grassland resources etc.)
Table 8 Statement of funds for the protection and restoration of natural resources
Resource category Year Total Fund name A Quota Source Fund name B Quota Source ……
Table 9 Statement of protection and restoration achievements related to natural resources
Protection and restoration project Changes in resources Changes in resource quality
Opening balance Increase Closing balance Opening balance Closing balance
(1) Statement of protection and restoration policies for natural resources
The policies contained in statements on the protection and restoration policies for natural resources include the laws and regulations, administrative measures, ecological subsidy policies, and key ecological projects issued by the central and local governments for ecological protection, environmental governance, resource restoration, and rational use. In particular, information about the names, objects, subsidy standards, sources, and ways of using funds for various ecological protection and restoration policies led by local governments must be included in these statements.
(2) Statement of funds for the protection and restoration of natural resources
The statement of funds mainly reflects the amounts and sources of funds, including funds invested by the state, funds invested by local governments, and funds from the society. This statement has an articulated relationship with Table 8.
(3) Statement of protection and restoration achievements related to natural resources
The statement of protection and restoration achievements related to natural resources (Table 9) mainly reflects the achievements in the key protection and restoration projects of natural resources and the investment of funds. Specifically, it reflects changes in the physical quantity and quality of natural resources, such as the concrete effects of the policy of returning farmland to forest and the area of restored woodland.

4.3.3 Statements of natural resource use

The third part of the report consists of the physical quantity statement of natural resource use (Table 10), the income statement of natural resource use (Table 11), and the income statement of the value realization of ecological products (Table 12). This section reflects the amount of natural resource use, the benefits obtained, and the economic benefits brought by a green development model that does not reduce resource levels.
Table 10 Physical scale of natural resource utilization
Resource category Utilization mode Unit Utilization of physical quantity
Land resources Agricultural land
Industrial land
Forest resources Timber
Freshwater resources Drinking water
Industrial water
Grassland resources
……
Mineral resources
……

Filling time: yyyy-mm-dd -yyyy-mm-dd.

Table 11 Income statement of natural resources use
Resource category Product name Unit Quantity Unit price Revenue Operating costs Profit
Land resources Compensated use ha
Forest resources Timber m3
Grassland resources Feed
……
Mineral resources Coal mine t

Filling time: yyyy-mm-dd -yyyy-mm-dd.

Table 12 Income statement of the value realization of ecological products
Resource category Green product name Quantity Unit Price Revenue Operating costs Profit
Land resources
Forest resources Forest health
Understory economy
Grassland resources Ecotourism
Mineral resources
……

Filling time: yyyy-mm-dd -yyyy-mm-dd.

(1) Physical quantity statement of natural resource use
The use of resources is also an important statistical content of the resource report, and it reflects various issues. Table 10 shows the actual status of the physical quantities of land, forest, freshwater, grassland, mineral resources, and other natural resources, which provides a basis for the supervision and control by functional departments.
(2) Income statement of natural resource use
The use of natural resources means the transformation of resources into economic value. For humans, there is an important relationship between economic expenditure and economic benefit in the protection and use of resources. Hence, the income from natural resource usage is also included in the statistical scope, which has an important reference value for studies on the relationships among economy, resources, ecology, and the environment. Table 11 shows the actual income achieved from the utilization of relevant natural resources.
(3) Income statement of the value realization of ecological products
The income statement of the value realization of ecological products is fully consistent with the ecological concept of “Lucid water sand lush mountains are invaluable assets”. The value realization of ecological products is mainly reflected in the income generated by the rational use of resources under the premises of not destroying the ecological environment and not reducing the quantity of resources in a specific period.

4.3.4 Statement of the destruction of natural resources

The fourth part of the report consists of a statement of the basic situation of natural disasters, a statistical table of resource destruction cases, and a statement of the degree of destruction of natural resources. These parts of the report not only reflect the local government’s supervision and protection of natural resources, but also form a correlation with the increases and decreases in resources in the natural resource balance sheet. The data have an inherent logic for mutual examination and verification. This part is an important basis for measuring the effectiveness of natural resource protection, regulation, publicity and education.
(1) Statement of the basic situation of natural disasters
Natural disasters have major influences on the ecological environment and human lives. On the contrary, changes in the ecological environment and the demands for natural resources will also induce various kinds of natural disasters. Therefore, the authors believe that the natural resource report system should include a table for the natural disaster situation.
It is essential to provide policy makers with information on the circumstances surrounding natural disasters and their impacts on one or more natural resources.
This table includes the basic information of disasters and the degrees of resource damage, as shown in Table 13.
Table 13 Statement of the basic situation of natural disasters
Major disaster Disaster type Time of occurrence Place of occurrence Cause Types of resources involved
(2) Statistical table of resource destruction cases
The artificial destruction of natural resources is also an important factor causing reductions in the quantity and quality of resources. The frequency of occurrence and other relevant data on artificial destruction can reflect the supervision and administrative performance of the main bodies responsible for natural resources(Table 14).
Table 14 Statistical table of resource destruction cases
Year Resource type Number of cases Specific destructive behavior How the situation was managed
(3) Statement of the degree of destruction of natural resources
The statement of the degree of destruction of natural resources (Table 15) reflects changes in the physical quantity and quality of natural resources that are caused by the negative influences of human factors. For example, fire can extensively damage forest land and grassland resources, and the quality of resources will also be seriously affected.
Table 15 Statement of the degree of destruction of natural resources
Resource destruction
event type		 Changes in resources Changes in resource quality
Before occurrence Reduced/destroyed after occurrence Before occurrence After occurrence
The degree of destruction of natural resources is an important measurement for determining whether the protection, supervision, and publicity and education work of natural resources are in place. The quantitative statistics of disasters, destruction, and degree of destruction can not only reflect the strength of local governments in the protection and supervision of natural resources but also form a corresponding relationship with the NRBS.

4.4 Articulation in the natural resource report

The existence of mutually inspected and verified articulation relations among different statements is one of the standards for testing whether the framework of the natural resources report and the design of each statement are reasonable. There are several articulation relations in the natural resources report.
(1) Balance articulation relation
Balance articulation mainly exists in the NRBS. On the left and right sides of the NRBS, one side reflects the increases in the physical quantity of resources, and the other side reflects the reductions. The two sides must maintain a balance with equal values and reflect the changes in the physical quantity of natural resources.
(2) Corresponding articulation relation
The corresponding articulation relation is mainly reflected in the increases, decreases, and quality changes of natural resources. For example, there are corresponding articulation relations between the liability offset in the NRBS and the increments of resources in the statement of protection and restoration achievements of natural resources; and between the liabilities in the NRBS and the decrements or destruction amounts of resources in the statement of the degree of destruction of natural resources. The related values should maintain consistency.
From a practical perspective, the articulation relations among statements play a certain role in promoting the authenticity and objectivity of the related data. All departments of the local government can cooperate to fill in the reports and statements, which can better reflect the administrative ability of the relevant administrative entities of natural resources and reduce the occurrence of filling in false information.

5 Conclusions and suggestions

The main purpose of this study is to expand the management attributes of natural resource accounting based on previous research. Based on an analysis and comparison of the existing research results, this paper proposes a mechanism for constructing an improved natural resources report by taking into account the Chinese government's supervision and auditing needs in resource administration and the deficiencies in the research and practice of the NRBS. The information structure and account contents of the natural resources report are given by analyzing the influences of human factors on natural resources, and the feasibility and operability are proven from both theoretical and logical perspectives. The main conclusions are as follows.
(1) At the theoretical level, the construction of the natural resources report provides a theoretical space for expanding the management attributes of natural resource accounting. Based on China’s research on the NRBS, the theory, content, and structure of natural resource accounting are expanded and improved, and the information attributes and management functions of natural resource accounting are perfected and upgraded to meet the administrative demands of the Chinese government. The resource report has a more compatible information structure than the resource balance sheet and provides a theoretical space for the expansion of natural resource management information in the future.
(2) At the practical level, the construction of the natural resources report improves the application of achievements in the research on the natural resource accounting information system. The natural resource report system can integrate the existing resource management information statistical systems and greatly enhance the application of the achievements in the research on the natural resource accounting information system. These achievements can not only serve the administrative goal of the off-office auditing of leading cadres but they can also serve the green GDP accounting, national balance sheet compilation, and top- level policy decision-making. For example, the NRBS, the statement of natural resource quality, and the statement of government policies can be used for the off-office auditing of leading cadres, while the accounting statement of natural resource value can provide information support for the accounting of the green GDP, and the statement of natural resource destruction can provide a reference for leading officials in determining responsibility for major liability accidents. Overall, the natural resource report system can provide solid data and information support to help China realize ecological civilization construction, natural resource administration system construction, and relevant policy formulation.
Investigating natural resource accounting and the natural resource management system is a long and arduous task. Hopefully the research on China’s natural resources report framework can provide a reference for international research in the field of natural resource accounting, especially the supervision of resource administration.

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