Accounting: the expanded

External goods and services
Employees	V
	A
	L
	U
Investors	E
Government	A
Amortization	D
	D
Surplus/Profit	E
	D

However, one limitation of the Value Added Statement is that it focuses only on financial items and pays no attention to intangibles and items that do not pass through the
market. The organization has social and environmental impacts as well as economic ones. The impacts may be intended or unintended, and may occur in the short-term (up to three years), medium-term (four to six years), and long-term (seven years or more). In the Expanded Value Added Statement, we want to consider all impacts that have occurred as a result of turning those externally purchased goods and materials into something else. To overcome these limitations, the Expanded Value Added Statement was developed to incorporate social and environmental value added (or subtracted) by an organization.²¹
The overall concept used to guide the application of the model is sustainability.

Sustainability has many definitions, but most arise out of the 1987 United Nations report, Our Common Future, also known as the Brundtland Report, which called for “a form of sustainable development which meets the needs of the present without compromising the ability of future generations to meet their own needs” (UNWCED, 1987, p. 8). In other words, development should be about improving quality of life for all while not destroying the environment, and not about increasing profits and the standard of living for a few.

The EVAS is not intended to replace existing financial statements but rather to be presented alongside them. By synthesizing traditional financial data with social and environmental data, the EVAS is another mechanism for understanding the dynamics of an organization and one that shows great potential for focusing attention on value creation and use. As such, it generates an additional set of questions that can be used to guide investment decisions. It challenges us to think about organizations in a different way —as creators or destroyers of value to a wide group of stakeholders. As an organizational tool, there is a shift from a narrow focus on how to maximize profit to a


²¹ A detailed explanation on how to put the statement together can be found in the book
What Counts: Social Accounting for Nonprofits and Cooperative, 2^nd Edition, Sigel Press, 2007.
wider focus on how to maximize value creation that is sustainable. This involves a two- step analysis. First, the contributions of each activity are determined across three dimensions: the economic, social and environmental. Second, each dimension (economic, social and environmental) is evaluated by stakeholders to measure the entire contribution of the organization (program, community) to sustainability.
The utility of the EVAS will be illustrated by applying it to an economically targeted investment (ETI). The case was created based on an analysis of documents and interviews around a master-planned real estate development called Collingwood Village. This involved looking at four institutions: a for-profit real estate development company; a non-profit community policing office; a non-profit neighbourhood center; and the municipal government. The real estate development company provided partial financial data about the construction of the buildings and infrastructure, and other financial data were obtained from public sources. Documents reviewed included minutes from government meetings; organization newsletters, pamphlets and reports; personal correspondence; and government reports available on Internet sites. Interviews were conducted with two top management and two staff members of the real estate company, with the executive director of the community policing centre, and with a researcher who had done previous research on this community. As noted above, the information needed to complete the Expanded Value Added Statement was incomplete; therefore, estimates were made for some variables such as operating expenses and maintenance fees. While this was not ideal, it does allow the reader to obtain a more complete picture of the potential of this work.