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Meaningful Metrics for a Smart Society
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Date: 2019-12-10 Page is: DBtxt001.php list0300-Reporting-entity-1

Definitions for TrueValueMetrics
Reporting Entity

Most financial reporting is done from the perspective of an organization, with the reporting oriented to its stakeholders. Most economic reporting is done in an aggregated manner, often at a national level. TrueValueMetrics (TVM) does socio-economic reporting with the community ... society ... as the reporting entity.

Community as the reporting entity! The community is where people live their lives ... it is the most important locus for the measurement of quality of life, in all its aspects. The analysis of society is impossibly complex at higher levels ... but at the level of the community, the issues are tangible, and everything may be put into context and prioritized in the most meaningful way.

Organizations. In the prevailing systems of reporting, most reporting is done by organizations ... private sector, public sector, for profit, not for profit, etc. In the TVM system these entities are a part of the community just as a cost center or profit center or subsidiary company are parts of the corporate reporting system.

Community ... a place. Community is a place ... and a place always exists ... though the socio-economic activity and quality of life associated with the place can change. TVM reporting shows how the place improves or deteriorates based on what activities happen in the place.

Community ... an affinity group. A community may also be an affinity group ... a school group, a church group, a business group. TVM reporting may be used for these groups, but these are components of a community that is a place. They may overlap ... and they certainly can contribute, but they are not a primary reporting entity for TVM.

Multi-community communities. A reporting entity may be better as a multi-community community than taking many little communities as independent reporting units. The fundamental concepts do not change ... but the effectiveness of the system is improved.

Neighborhoods. In a bigger community, the neighborhood may be the optimum reporting entity. In big urban areas, it is the neighborhood where socio-economic activities take place and where progress may be observed.

Blocks. In high population densities areas there might also need to be reporting block by block. There is a big difference in the outcome between a barrel of good apples, and a barrel of apples with just one bad apple in it. TVM reporting at the block level differentiates between good and bad apples.

Roll-up ... aggregation. TVM reporting may be aggregated in just the same way that corporate accounting can be aggregated using the process of consolidating accounts. The TVM system of aggregation is based on the place and not the affinity group or the organization.


TVM has a community focus treating the community as the reporting entity. The rules for consolidating accounts apply as all the subsidiary units doing economic activities in the community are brought into account. TVM includes transactions that reflect value as well as the normal money transactions.

TVM is more accountancy than a statistical construct. The data are as simple as possible ... the transactions as small as possible, as many as possible and as clear as possible. Some of the value of TVM derives from how TVM can do accounting for community progress.

In the following graphic ... the value of the community at the beginning of the period is the same as it is at the end of the period ... the community has gone about its business for the period, the time has gone by, but nothing has changed.

Ordinary activities produce no change

Data about the daily activities is not needed in the TVM system in order to be very clear about progress ... whether it is progress or problem. All that is needed is data about the value changes that have taken place from the beginning of the period to the end of the period as shown below.

  • GOOD ... progress
  • OOPS ... problem
IMAGES ARE MISSING ... TO BE LOCATED AND INSERTED



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TrueValueMetrics (TVM) is an Open Source / Open Knowledge initiative. It has been funded by family and friends plus donations from well wishers who understand the importance of accountability and getting the management metrics right. TVM is a 'big idea' that has the potential to be a game changer leveling the playing field so the wealth and power is shared on a more reasonable basis between people who work for a living and those that own the economy and the levers of power. In order to be effective, it cannot be funded in the conventional way with a for profit business plan, but absolutely must remain an open access initiative.
WE WANT TO MAINTAIN AN OPEN KNOWLEDGE MODEL
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