Accounting: the expanded

Putting it All Together

Combining all of these elements—building construction, amenities, social and environmental impacts—in the Expanded Value Added Statement (Table 5.9) shows that Community Village created almost $228 million of value added over the ten years covered in this example. If only the financial items were considered, as they are in traditional accounting, the value added would be $201 million. The Expanded Value Added Statement highlights the additional value added created because of deliberate social and environmental considerations taken into account, and provides a way of communicating this information to a wider public. It also makes explicit how this value added was distributed and the primary stakeholders involved in keeping this community viable.

Discussion

The Expanded Value Added Statement for Community Village (Table 5.9) shows that financial information alone does not tell the organization’s whole performance story. The Expanded Value Added Statement focuses on value creation and creates greater awareness of at least two areas:

1. 
   The role of the different stakeholders in creating financial, social and environmental wealth;
   
2. 
   The interconnectedness of the economic, social and environmental dimensions of organizational activities.
   

Some of the limitations of the Expanded Value Added Statement are imposed by the selection of items to be included and by the methods available to put a monetary value on them. In this regard, the challenges faced by the Expanded Value Added Statement are shared by other forms of alternative accounting and economics, namely identifying, measuring, quantifying, standardizing and placing a value on key social and environmental indicators which could measure and encourage sustainable performance (Ranganathan, 1999; White & Zinkl, 1999).
Another challenge is to assess not only value added but also value subtracted, as it is important for accounting statements to illuminate both positive and negative impacts on sustainability. These are areas that require continued development and discussion (see Bennett, Rikhardsson, & Schaltegger, 2003; Gray & Bebbington, 2001; Rikhardsson, Bennett, Bouma, & Schaltegger, 2005; Schaltegger & Burritt, 2000).