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Date: 2019-10-18 Page is: DBtxt001.php L0700-TVM-accounting-for-past-present-future

ACCOUNTING FOR
PAST PRESENT and FUTURE

PAST
PRESENT
FUTURE

PEOPLE FIRST and a SUSTAINABLE WORLD
HOW ACCOUNTING WORKS
HOW DOUBLE ENTRY ACCOUNTING WORKS

CONVENTIONAL FINANCIAL ACCOUNTING
ACCOUNTS FOR THE PAST, THE PRESENT AND THE FUTURE
Very powerful ... Used in every business
... more
HISTORY ... more
History has already happened. We can learn from it, and it is the reason why and how we got to the present time.
Beginning of Period (BOP)
STATE
... more
The Beginning of Period (BOP) STATE is a record at a moment in time of what has gone before
ACTIVITIES ... more
Activities CHANGE the STATE from what it was at the BOP to what it gets to be at the EOP
End of Period (EOP)
STATE
... more
The End of Period (EOP) STATE is a record at a another moment in time ... the end of the period
FUTURE ... more
The future has a Net Present Value (NPV) that is a mix of many factors.
BALANCE SHEET (BOP)
A summary of the Balance Sheet accounts at the beginning of the period.
P&L ACCOUNT
A summary of the P&L accounts for the period.
CASH FLOW
How P&L accounts change the Balance Sheet
BALANCE SHEET (EOP)
A summary of the Balance Sheet accounts at the end of the period.
EQUITY VALUATION
A MEMO Balance Sheet that adds in the Net Present Value (NPV) of future profit flows

TRUE VALUE IMPACT ACCOUNTING
ACCOUNTS FOR THE PAST, THE PRESENT AND THE FUTURE
All Capitals ... All Impacts ... All Actors
... more
Accounting
for everything
Conventional accountancy is a very good basic framework to enable the accounting for everything. The same basic concepts can be used but applied in a slightly different way.
HISTORY ... more
Use a time series of Comprehesive Value Balance Sheets that show changes over time
Beginning of Period (BOP)
STATE
... more
The Beginning of Period (BOP) STATE is a record at a moment in time of ALL the CAPITALS of what has gone before
ACTIVITIES ... more
Activities CHANGE the STATE from what it was at the BOP to what it gets to be at the EOP
Activities have multiple impacts on SOCIAL CAPITAL, NATURAL CAPITAL and ECONOMIC CAPITAL (which includes financial capital)
Positive social and economic impacts are often associated with negative environmental impacts.
End of Period (EOP)
STATE
... more
The End of Period (EOP) STATE is a record at a another moment in time ... the end of the period ... of ALL the CAPITALS
FUTURE ... more
The future has a Net Present Value (NPV) that is the sum of the Net Present Value (or cost) for all the elements of SOCIAL CAPITAL, NATURAL CAPITAL and ECONOMIC CAPITAL
VALUE BALANCE SHEET (BOP)
A summary of the Value Balance Sheet accounts at the end of the period incorporating the Net Present Value (or cost) for all the elements of SOCIAL CAPITAL, NATURAL CAPITAL and ECONOMIC CAPITAL as they were at the Beginning of the Period.
TRUE VALUE ACTIVITY ACCOUNTS
A summary of the activity accounts for the period.
TRUE VALUE IMPACT SUMMARY
How activity accounts for the period changed the Value Balance Sheet from the beginning to end of the period.
VALUE BALANCE SHEET (EOP)
A summary of the Value Balance Sheet accounts at the end of the period incorporating the Net Present Value (or cost) for all the elements of SOCIAL CAPITAL, NATURAL CAPITAL and ECONOMIC CAPITAL as of the End of the Period.

ACCOUNTANCY'S CORE CONCEPTS
GAAP Generally Accepted Accounting Principles used everywhere in the world More on CORE-CONCEPTS
B/S and P&L account Accounting differentiates between 'Balance Sheet' accounts and 'Profit and Loss' accounts. This is a key step in understanding cause and effect.
Balance sheet accounts Typically these are segmented as follows: Current assets: Current liabilities: Fixed assets: Other assets: Long term debt: Stockholders' Equity
P&L accounts Typically these are summarized as follows: Sales revenue: Cost of Sales: Gross Margin: General, Sales and Administration expenses: Depreciation and amortization: Research and Development expenses: Taxes: Financial charges; Net profit
A sub total titled EBITDA is Earnings Before Interest, Taxes, Depreciation and Amortization
PROFIT PROFIT or FINANCIAL PROGRESS can be measured simply by comparing the EOP Balance Sheet with the BOP Balance Sheet. The Change is PROFIT.
Externalities
are ignored
Conventional financial accounting only accounts for money transactions and those that are within a reporting envelope.
Accrual -v-
Cash basis
Business financial accounting systems are 'accrual' accounting systems. Most government accounting and public sector is cash basis accounting. Accrual systems are far more rigorous. Seems that governments and legislators like the sloppiness!
.
TRUE VALUE IMPACT ACCOUNTING
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