Accounting: the expanded

Question Two: Comparing the Three Cases

Q2. Can an organization’s contribution to sustainability or detraction from unsustainability (quality of life and environmental health) be reflected in the Expanded Value Added Statement? If so, what can be learned from the application of the Expanded Value Added Statement as applied in different contexts?

Each of the three different cases examined in this thesis presented examples of how non-monetary elements and externalities can be included in an Expanded Value
Added Statement that integrated economic, social and environmental factors. The first case looked at the value added of volunteer work for the organization by members of a scholarly association (ARNOVA). The value added was determined by considering the hours and out-of-pocket expenses contributed by members in a one-year time period.
This significant source of value added to the organization was previously invisible in the traditional accounting statements.
The second case, Sustainable Building, applied the Expanded Value Added Statement over a 20-year time period by developing a combined capital and operating budget for a building project. In this case, the value added was determined by re- analyzing data obtained by Kats et al. (2003) in a study of 33 sustainable buildings in the
U.S.A. The resulting Expanded Value Added Statement showed the costs and benefits of building in a sustainable way versus using traditional building techniques.
The third case, Community Village, was based on Collingwood Village, a master- planned community in the city of Vancouver. The value added was determined by examining public documents and financial statements produced by different organizations in this development. This case, arguably the most complex of the three, shows how the Expanded Value Added Statement can be used to integrate the economic, social and environmental impacts and to help make investment decisions that support sustainability.
All three cases in this research included factors that could be used in an analysis of an organization’s contribution to sustainability, in other words, in the analysis of its contribution to quality of life and environmental health. In applying the Expanded Value Added Statement to socially minded organizations in different contexts, the identification
of these factors was made possible by looking at key factors that helped the organizations achieve their social and economic missions.
Applying the Expanded Value Added Statement in different settings also allowed for comparative analysis. In doing so, I identified seven areas in which the boundaries of traditional accounting were expanded:

1. 
   how wealth was measured;
   

2. 
   to whom wealth was distributed;
   

3. 
   to whom the entity was accountable;
   

4. 
   new items made visible;
   

5. 
   time period considered;
   

6. 
   unit of account; and
   

7. 
   area of focus.
   

The first three elements, having to do with wealth creation, distribution, and accountability, were in all three cases. Table 6.1 compares how these three elements are considered in the traditional income statement, in the Value Added Statement, and in the Expanded Value Added Statement. As shown in Table 6.2, the last four elements varied across the cases, but each one provided insights for the adaptation of the Expanded Value Added Statement to different contexts.