image missing Date: 2021-10-26 Page is: DBtxt003.php L0900-TVM-multi-dimension-accountancy-01a


TVM Principles of Management
Multi-Dimension Impact Accountancy
Open L020-BR-BRIEFS SiteNav L0700-SN-07-TVM-MANAGEMENT Open L07-07-TVM-MANAGEMENT
EFFECTIVE METRICS
FROM CONVENTIONAL TO FULL SCOPE COMPREHENSIVE ACCOUNTANCY
Conventional Accountancy More TVM Enhanced Accountancy More Full Scope TrueValueMetrics More
CONVENTIONAL FINANCIAL ACCOUNTANCY
The conventional financial accounts of a company include a balance sheet and the beginning of the period (BOP), a balance sheet for the end of the period (EOP) and a profit and loss account for the period. The balance sheet shows all the assets and the liabilities of the company. The profit and loss account shows all the revenues and the expenses of the company. As described in the section above, the change in the balance sheet is a measure of progress or profit and the total revenues less the total expenses is also the profit of the company for the period.
ENHANCED ACCOUNTANCY INCORPORATING EXTERNALITIES
Enhanced accounts combines conventional financial accounts with the impact that economic activities of the entity are having not only on the economic capital of the entity but also on social capital and environmental capital outside the entity.
All of this is done from the perspective of the reporting entity, and reflects the impacts that the entity is having on the 'so-called' externalities.
FULL SCOPE TRUEVALUEMETRICS
Full scope TrueValueMetrics relates all the activities of the reporting entity on the STATE of an external entity. This external entity may be an individual (that is the person perspective, a community (that is the place perspective) or a larger region (like a country, state or nation), or the product perspective.
Optimizing performance of any aspect of the overall socio-enviro-economic system is complex and requires compromise. Up to now economic analysis has been dominated by the goal of optimizing the performance of financial capital, without taking into consideration the very real constraints of the other 'means of production, that is, the classical economics, labor and land ... and now in the framing of TrueValueMetrics, the dimension of society (social capital) and the dimension of the environment (natural capital). Essential only financial performance (economic capital) has been optimized, with the other capitals ignored.


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