Value Added Reporting: Lessons for the United States

Value Added Reporting: Lessons for the United States

Value Added Reporting: Lessons for the United States

Value Added Reporting: Lessons for the United States

Synopsis

A new form of accounting statement--the value-added statement--is gaining popularity in the United Kingdom, and could easily be adopted in the United States, with beneficial results. Riahi-Belkaoui maintains that the value-added statement can be viewed as a modified income statement: it reports the operating performance of a company at a given point in time, using both accrual and matching procedures. Unlike the income statement, however, the VAS is interpreted not as a return to shareholders but as a return to the larger group of capital and labor providers. Belkaoui spells out how the statement is developed, how it can be adapted to U.S. needs, and what its potential benefits would be. His book will thus interest not only accountants, teachers, and students who follow trends in international and multi-national accounting, but also those who want to prepare for the development of techniques and procedures that might be anticipated in the U.S.

Excerpt

A new form of accounting statement -- the value added statement -- is gaining popularity in the corporate annual reports of the largest companies in the United Kingdom. This new statement can be viewed as a modified version of the income statement. Like the income statement, the value added statement reports the operating performance of a company at a given point in time, using both accrual and matching procedures. Unlike the income statement, however, it is interpreted not as a return to share- holders but as a return to the larger group of capital and labor providers. This book shows that the value added statement can be easily derived from the income statement and therefore is easily adaptable by U.S. companies. In addition, the usefulness of such a statement in the U.S. context is illustrated by a presentation of the many advantages of the statement (Chapter 1), the usefulness of the value added concept in explicating the characteristics of target takeovers in the United States (Chapter 2), the relationship between the value added concept and the systematic risk of U.S. companies (Chapter 3), and its usefulness in financial analysis (Chapter 4).

The book should be of value to those interested in the future trends of international and multinational accounting, including practicing accountants, business executives, accounting teachers and researchers, and students.

Many people helped in the development of this book. I received considerable assistance from University of Illinois at Chicago students, especially Kalliopi Karabatsos, Veena Rao, and Pei-To. Financial assistance . . .

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