This chapter develops our understanding of environment-economic-social relationships. Here we will make progress towards explaining the concept and tools of water accounting. No natural resource is an 'island', and water is perhaps the most interdependent resource of all. All natural resources are intimately connected to others by complex and powerful ecological and other biophysical processes. For example, the forests that depend on the sun, water and soil also have marked effects on the conditions and services provided by water and soils. With industrialisation and population growth, the influence and impact of human (or 'anthropogenic') activity on natural cycles is a fundamental feature of our economies. When we combine the basic necessity for water with the need to understand resources as part of closely interconnected natural systems, there is little wonder that integrated water resource management has become a major focus and approach of modern environmental management and science.