Date: 2024-05-19 Page is: DBtxt003.php bkTVM009050300
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Burgess Manuscripts
TrueValueMetrics ACTION INFORMATION FOR ALL OF SOCIETY Metrics about the State, Progress and Performance of Society, the Environment and Economy Metrics about Impact on People, Place, Planet and Profit |
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Chapter 5
ACCOUNTING'S KEY CONCEPTS 5-3 ACCOUNTING FOR IMPACT The sector perspective should not be ignored ... ... ... |
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Accountancy Reports
How value chains benefit community The end to end value chains tell interesting stories ... and maybe for this reason are not easy to compile. The value chain works well when everyone is making money, and it matters less in this situation that some party is making a lot of money, while others are making only modest amount. Things work when everyone is in positive money making territory. In a situation where one main party is making most of the money ... it is likely that this is reflected in the capital markets as a high valuation of the company's stock ... but this is dangerous. When attempts are made to make the allocation of money and value fairer with respect to the community, the money making by the one main party gets reduced ... and this in turn reduces the valuation on the capital markets. Getting equitable distribution of value adding between corporate enterprise and society is not going to be easy ... and there may be major disruption of capital markets as this adjustment proceeds. In corporate accountancy and capital market terms this will be a bad change ... but looked at through the TVM Value Accountancy perspective and including community values it is likely that society will be far ahead. Making data valuable There is a wide recognition that knowledge confers power and therefore has value. There are many organizations that have data ... and knowledge ... but these are little used for social benefit, rather, they are used to give the organization some competitive advantage. Community Accountancy aims to make data useful as management information for development ... in a complete comprehensive framework. This is the missing element that is needed to bring the north and the south together for global benefit.
Foreign Direct Investment (FDI) is investment from outside the community ... and while there may be benefit from this investment in the community, this is going to be some share of the total benefit arising from the investment. Experience shows that this share may be quite small, and maybe quite negative when all the social costs to the community are taken into account. The split of value added is critical to the success of the local community, and almost always a deep secret probably because the share attributed to the community is so small. Sustainability Sustainability is a fashionable idea ... but with many meanings. One is that sustainability is to do with damage being done to the environment by the human race ... and the issues of the survival of our specie. Another is more pedestrian relating to the ability of a person or an organization to have enough financial resources to pay its bills and survive economically. One view of sustainability relates to the environment. Are economic activities doing excessive environmental damage or consuming too much of resources? |
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