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TRUE VALUE METRICS
Accounting and Accountability
for PEOPLE, PLANET and PROFIT
PREVAILING METRICS ARE NOT FIT-FOR-PURPOSE
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WE WANT TO MAINTAIN AN OPEN KNOWLEDGE MODEL
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THE DOMINANT GOALS USED FOR DECISION MAKING ARE:
GDP GROWTH CORPORATE PROFITS STOCK PRICES
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TODAY'S MAJOR METRICS REFLECT THESE GOALS AND ARE NOT FIT-FOR-PURPOSE.
Performance is measured in money:
GDP growth is the main proxy for progress;
Profit performance drives most all corporate decisions;
When profits increase stock owners realize a wealth increase!
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TRUEVALUEMETRICS (TVM) IS MORE COHERENT, COMPREHENSIVE AND SUITED TO THE 21ST CENTURY
Accounting for ALL the CAPITALS;
Accounting for ALL the IMPACTS;
Accounting for ALL the ACTIVITIES ... all the PROCESSES;
Accountability for all the ACTORS ... for EVERYONE; and
Addressing progress and performance from ALL the PERSPECTIVES.

Rather than thinking only in terms of financial progress and performance, ALL the capitals should be accounted for ... that is social capital, environmental or natural capital and economic capital, where financial capital is just one of the components of economic capital. An important aspect of TVM is that many of the core concepts of double entry accounting are being utilized to account for the state and impact of everything, not only financial elements.
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The fact that productivity has improved massively over the past 50 years ought to mean the population at large has seen substantial improvement in their quality of life ... but this has not been the result. Rather few have done very well, while the vast majority have flatlined or seen their household wealth decline. This is serious socio-enviro-economic dysfunction which has not been addressed meaningfully by those with wealth, power and influence. While many things have improved in a very impressive way during the last half century, too many people have been left behind and are living in terrible conditions. Part of this has been caused by the misuse of data to support policy formulation that favors those with power and influence. The misuse of power has been a governance issue since ancient times, and remains an ongoing issue. Better metrics can help.
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The underlying technical capabilities in the modern world are impressive but not widely appreciated. This is in large part because many of the people with power and wealth are using their influence in ways that do not optimise for the general good but more for their own interests. Many of the ideas that served well in the 19th and 20th centuries are no longer fit-for-purpose in the 21st century, including the management accounting and economic indicators that focus almost entirely on issues of interest to investors and corporate officers, while effectively ignoring critical social and environmental externalities. To add insult to injury, management at the national level is a political exercise where money determines policy more than a fair democratic process.
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The use of accounting to achieve some degree of financial control goes back to the 1700s when it was being applied in commerce. Financial acounting became an important enabler of the industrial revolution and the need for big investments in factories and transport in the 19th century and into the 20th century. The scale of industrial activity in the late 20th century and the present 21st century requires not only the accounting for financial activities but also accounting for impact on everything including society (people) and the environment (nature). In conventional financial reporting these have been treated as 'externalities' and ignored. This is no longer a reasonable option ... though meaningful change has been resisted by many with wealth, power and influence because they understand what change might mean to their own position!
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The idea of BALANCE SHEET (B/S) accounts being a measure of STATE and PROFIT and LOSS (P&L) accounts measuring activity performance is a core concept of financial accounting. Note that the CHANGE in the BALANCE SHEET is the same as the PROFIT or LOSS reported via the P&L accounts. Accordingly, PROGRESS may be measured simply by looking at the CHANGE in the STATE (B/S) which can be much simpler than keeping track of all the activities that cause the change in state. Over time, business organizations have improved their technical performance in ways that improve the productivity of activities and in turn create profit that improves the state of their financial capital. TVM is applying the same conceptual logic to the impact that business and other activities have on the state of ALL the capitals ... everything in the realm of social capital, natural capital and economic capital (of which financial capital is a part).
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EFFECTIVE BETTER METRICS ARE ESSENTIAL
THEY MUST BE COHERENT AND COMPREHENSIVE ... AND EASY TO APPLY

CONVENTIONAL FINANCIAL ACCOUNTING, USED EVERYWHERE FOR A VERY LONG TIME

BETTER METRICS WITH ACCOUNTING FOR IMPACT ON EXTERNALITIES

BETTER METRICS WITH ALL IMPACTS ACCOUNTED FOR COMPREHENSIVELY
The idea of BALANCE SHEET (B/S) accounts being a measure of STATE and PROFIT and LOSS (P&L) accounts measuring activity performance is a core concept of financial accounting. Note that the CHANGE in the BALANCE SHEET is the same as the PROFIT or LOSS reported via the P&L accounts. Accordingly, PROGRESS may be measured simply by looking at the CHANGE in the STATE (B/S) which can be much simpler than keeping track of all the activities that cause the change in state. Over time, business organizations have improved their technical performance in ways that improve the productivity of activities and in turn create profit that improves the state of their financial capital. TVM is applying the same conceptual logic to the impact that business and other activities have on the state of ALL the capitals ... everything in the realm of social capital, natural capital and economic capital (of which financial capital is a part).
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MORE ABOUT Overview Site Nav Brief Nav MoreBRNav
ALL SiteNav SN-BR-ALL
SEES OVERVIEW L07-01-SEES MoreLinks SN-BR-SEES
TVM MANAGEMENT METRICS L07-01-TVMM SN-TVMM Briefs-04
TVM CORE CONCEPTS SN-TVM-CC
ACTIVITIES L07-01-ACTI MoreLinks Briefs-03 SN-BR-ACTI
ACTORS L07-01-ACTO MoreLinks Briefs-03 BR-ACTO
CAPITALS L07-01-CAPS MoreLinks Briefs-02 SN-BR-CAPS
ORGANIZATIONS L07-01-ORGS MoreLinks Briefs-01
PEOPLE L07-01-PEOP MoreLinks Briefs-01
PERFORMANCE L07-01-PERF SN-PERF Briefs-01 SN-BR-PERF
PERSPECTIVES L07-01-PERS MoreLinks SN-BR-04 BR-PERS
PLACE L07-07-PLAC MoreLinks SN-BR-PLACE
POSSIBILITIES L07-01-POSS SN-POSS Briefs-02 SN-BR-POSS
PROBLEMS L07-01-PROB SN-PROB Briefs-02 SN-BR-PROB
PROCESSES L07-01-PROC MoreLinks Briefs-01
PRODUCTS L07-01-PROD MoreLinks Briefs-01
PROGRESS L07-01-PROG SN-PROG Briefs-01 SN-BR-PROG
SECTORS / INDUSTRIES L07-01-SECT ??? Briefs-01
STREAMS / STRANDS / STRINGS L07-01-STRE L0200-SN-SS Briefs-01
T. PETER BURGESS L07-01-TPB MoreLinks Briefs-05 SN-BR-TPB
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TrueValueMetrics (TVM) is an Open Source / Open Knowledge initiative. It has been funded by family and friends. TVM is a 'big idea' that has the potential to be a game changer. The goal is for it to remain an open access initiative.
WE WANT TO MAINTAIN AN OPEN KNOWLEDGE MODEL
A MODEST DONATION WILL HELP MAKE THAT HAPPEN
The information on this website may only be used for socio-enviro-economic performance analysis, personal information, education and limited low profit purposes
Copyright © 2005-2021 Peter Burgess. All rights reserved.
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