Sunday, April 13, 2008

Identifying Value Adding and Value Destruction

Dear Colleagues

The identification of value adding and value destruction is second nature to experienced accountants ... and stock analysts do this work to help value stocks.

But much more is needed. This is one of the reasons why Social Benefit Accountancy (SBA)is needed. SBA provides a systematic way of looking at economic activities and determining the scale of the value adding or value destruction.

SBA extends the logic of accountancy so that value adding is looked at not only from the corporate or organizational persective, but also the wider societal perspective.

This is a missing element in the analysis of organizations like the UN and the World Bank. In the latter case, the amount of disbursement gives a measure of size, but does nothing to help with an understanding of accomplishment. Metrics around value adding is the missing element, and provided by SBA.


Peter Burgess

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