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Date: 2019-12-11 Page is: DBtxt001.php list0300-Value-creation-1

Definitions for TrueValueMetrics
Value Creation

NEEDS REWORKING

Value creation Economic activity is There is value creation when existing resources are used and something of more value than the resources used is created. In corporate accounting profit is revenue less cost ... in TVM, value creation is the resultant value less the value consumed.

Value adding and value destruction! Value adding happens when the resulting value is greater than the value consumed. Value destruction is when the resulting value is less than the value consumed. TVM takes into consideration ALL the issues that impact value to society and the community ... in contrast to the corporate profit measure that only brings into account the money revenues and money costs to compute profit.

Value reporting! Value reporting needs to be as pervasive as profit reporting. Every organization should be reporting not only its money accounting, but also its value accounting. Capital markets should value stock based on both money profit and value.

Value in Not-for-Profit activities! The concept of profit has no meaning as a performance measure for not-for-profit activities ... but value has a very real meaning. The TVM value construct applies everywhere in both private and public sector organizations that are working for the public good, but without effective performance metrics.



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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.
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