Mdia p3-01-core-concepts-150420

1. MULTI DIMENSION IMPACT ACCOUNTING
File: MDIA-Framework-004-150411-WIP.odp Peter Burgess (c) All rights reserved
MDIA
Core Concepts

2. MDIA CORE CONCEPTS
Uses key concepts from accountancy;
● Double Entry
● Balance Sheets and the Profit and Loss Account
● State, Process and Flow;
● State, Progress and Performance;
● Cost, Price and Value;
● Quantification and Standard Value;
● Data at the Center;
● Feedback;
● Beyond the Reporting Entity.
MULTI DIMENSION IMPACT ACCOUNTING

3. Double Entry Accounting
● Double Entry Accounting is the core
strength of a good accounting system;
● Every money transaction impacts two
accounts; and the system as a whole
is always in balance;
●
MULTI DIMENSION IMPACT ACCOUNTING

4. State, Process and Flow
● State;
● Process; and
● Flow.
MULTI DIMENSION IMPACT ACCOUNTING

5. MULTI DIMENSION IMPACT ACCOUNTING

6. MULTI DIMENSION IMPACT ACCOUNTING

7. MULTI DIMENSION IMPACT ACCOUNTING

8. MULTI DIMENSION IMPACT ACCOUNTING

9. State, Progess and Performance
● State is the Balance Sheet of the entity
at a moment in time;
● Progress may be measured by
comparing
the Balance Sheet changes between the
beginning and the end of the period;
● Performance is a measurement that
relates Progess to the resources
consumed.
MULTI DIMENSION IMPACT ACCOUNTING

10. Cost, Price and Value
● There should be clarity about what is cost
and what is price;
● A buy/sell transaction takes place at a price;
● The buy price becomes the buyer's cost;
● There is a lot of data about price, but
relatively little accessible data about cost;
● Value is a very important idea, but quantified
data about value is missing;
● Money based cost, price and value ignore
everything about impact on people and
planet.
MULTI DIMENSION IMPACT ACCOUNTING

11. Quantification / Standard Value
● Quantification
● Standard Value;
●
MULTI DIMENSION IMPACT ACCOUNTING

12. Data at the Center
● Data at the Center;
●
MULTI DIMENSION IMPACT ACCOUNTING

13. Beyond the Reporting Entity
● Beyond the Reporting Entity
MULTI DIMENSION IMPACT ACCOUNTING

14. Amazing complexity …
● Global North/Global South/Community
● Big Organizations - National and
International / Small communities
● Elements of Society: National level
and community
MULTI DIMENSION IMPACT ACCOUNTING

15. MULTI DIMENSION IMPACT ACCOUNTING

16. MULTI DIMENSION IMPACT ACCOUNTING

17. MULTI DIMENSION IMPACT ACCOUNTING

18. Feedback
● Feedback is best when it is fast
and very focused on practical
actionable response
● In this example feedback happens
in the small community BEFORE
the data reaches city, state, national
and international big data systems
MULTI DIMENSION IMPACT ACCOUNTING

19. MULTI DIMENSION IMPACT ACCOUNTING

20. Malaria in the community
● Get data / facts about malaria in the community
● This becomes the STATE – BOP*
● PLAN malaria control interventions
● IMPLEMENT malaria control interventions
● Get data about costs
● Get data / facts about resulting malaria in
the community
● This becomes the resulting STATE EOP*
● Assess change from BOP to EOP
MULTI DIMENSION IMPACT ACCOUNTING
* BOP – EOP … Beginning and End of Period

21. MULTI DIMENSION IMPACT ACCOUNTING

22. Next 2 slides
● The first slide is a simplified representation of
the State – Flow – State idea for ALL elements
of the Socio-Enviro-Economic System
● The second slide shows what the conventional
money metrics measure … just a tiny part of
everything that matters.
MULTI DIMENSION IMPACT ACCOUNTING
* BOP – EOP … Beginning and End of Period

23. MULTI DIMENSION IMPACT ACCOUNTING
File: MDIA-Framework-004-150411-WIP.odp Peter Burgess (c) All rights reserved

24. MULTI DIMENSION IMPACT ACCOUNTING

25. The makeup of:
● Human Capital;
● Financial Capital;
● MBSS*; and
● Natural Capital
MULTI DIMENSION IMPACT ACCOUNTING
* MBSS – Man Built Structures and Systems

26. MULTI DIMENSION IMPACT ACCOUNTING
ELEMENTS OF THE SYSTEM by SEGMENT
Financial
Capital
Human
Capital
Man Built
Structures
& Systems
Natural
Capital
Sun
Financial
Capital
Human
Capital
Man Built
Structures & Systems
Natural
Capital
MoneyFood Government Nature (life)
Sun
Nature (life)
Capital Market
Value
Water
Laws. Rules Nature (life)Land
Shelter
Infrastructure WaterClothes
Industry Nature (life)Air
Health
Mining Ecoservices
Education
EnergySkills
Waste
Recreation Retail
Culture
LogisticsReligion
Knowledge
Technology
Security
Energy
Mobility
Profit

27. STATE – FLOW (activities) – STATE
● Financial Capital;
● Human Capital;
● MBSS*;
● Natural Capital;
● Sun
MULTI DIMENSION IMPACT ACCOUNTING
* MBSS – Man Built Structures and Systems

28. MULTI DIMENSION IMPACT ACCOUNTING
Resource
Depletion
Environment
Degradation
Improves
QoL
Super Rich
Affluent
BoP
Industrial
Mining
Energy
Government
Not-for-Profit
Paperwork
Banking
Water
Air
EcoServices
Habitat
Law
Minerals
Energy
Land
Improves
Environment
Maintains
Natural
Capital and
remediates
Produces
Products
Improves
QoL
Financial
Progress
Renewables
Waste
Creation
Super Rich
Affluent
BoP
Industrial
Mining
Energy
Government
Not-for-Profit
Paperwork
Banking
Water
Air
EcoServices
Habitat
Law
Minerals
Energy
Land
Sun
STATE - BOP
Sun
Financial
Capital
Human
Capital
Man Built
Structures
& Systems
Natural
Capital
Sun Sun
STATE - EOP
Sun
Financial
Capital
Human
Capital
Man Built
Structures
& Systems
Natural
Capital
Sun
Compromises
Society
Activities
Bad Impact Good Impact

29. The next 4 slides
STATE BOP … ACTIVITY ACCOUNTING … STATE EOP
● Financial accounting:
● Financial accounting plus GOOD impacts;
● Financial accounting minus BAD impacts;
● Financial accounting with BOTH impacts.
MULTI DIMENSION IMPACT ACCOUNTING

30. MULTI DIMENSION IMPACT ACCOUNTING
Sun
FINANCIAL
ACCOUNTS
Financial Accounts describe Economic Activity
REVENUES
Products Sold X Price
Products Bought X Price
BOP EOP
Energy Bought X Price
Employee Benefits
Employee Payroll
Other expenditures
Asset use costs
Depreciation
Financial expenses
Pro-good expenditures
Taxation
Profit
File: MDIA-Framework-004-150411-WIP.odp Peter Burgess (c) All rights reserved
Sun
Financial
Capital
Human
Capital
Man Built
Structures
& Systems
Natural
Capital
Sun SunSun
Financial
Capital
Human
Capital
Man Built
Structures
& Systems
Natural
Capital
Sun

31. MULTI DIMENSION IMPACT ACCOUNTING
Sun
FINANCIAL
ACCOUNTS
ADD positive impact not accounted for
REVENUES
Products Sold X Price
Products Bought X Price
BOP EOP
Energy Bought X Price
Employee Benefits
Employee Payroll
Other expenditures
Asset use costs
Depreciation
Financial expenses
Pro-good expenditures
Taxation
Profit
REVENUES
Products Sold X Price
VALUE to buyer
Equals
HUMAN CAPITAL ADD
Wages and benefits
What value to
employee?
Pro-good expenditures
What value to society?
Taxation
What value to society?
POSITIVE
IMPACT NOT
ACCOUNTED
FOR
File: MDIA-Framework-004-150411-WIP.odp Peter Burgess (c) All rights reserved
Financial
Capital
Human
Capital
Man Built
Structures
& Systems
Natural
Capital
Sun Sun
Financial
Capital
Human
Capital
Man Built
Structures
& Systems
Natural
Capital
Sun

32. MULTI DIMENSION IMPACT ACCOUNTING
Sun
FINANCIAL
ACCOUNTS
DEDUCT negative impact not accounted for
REVENUES
Products Sold X Price
Products Bought X Price
BOP EOP
Energy Bought X Price
Employee Benefits
Employee Payroll
Other expenditures
Asset use costs
Depreciation
Financial expenses
Pro-good expenditures
Taxation
Profit
For products and
energy bought
and this process
Free use of the
commons and
public services
& infrastructure
Degradation
of land
Water scarcity
and degradation
Air pollution:
Impact on people
Air pollution:
Impact on climate
Air pollution:
Impact on people
Solid waste
Resource
depletion
Environmental
Degradation
Negative
impact
File: MDIA-Framework-004-150411-WIP.odp Peter Burgess (c) All rights reserved
Financial
Capital
Human
Capital
Man Built
Structures
& Systems
Natural
Capital
Sun Sun
Financial
Capital
Human
Capital
Man Built
Structures
& Systems
Natural
Capital
Sun

33. MULTI DIMENSION IMPACT ACCOUNTING
Sun
FINANCIAL
ACCOUNTS
ACCOUNTING FOR EVERYTHING
REVENUES
Products Sold X Price
Products Bought X Price
BOP EOP
Energy Bought X Price
Employee Benefits
Employee Payroll
Other expenditures
Asset use costs
Depreciation
Financial expenses
Pro-good expenditures
Taxation
Profit
REVENUES
Products Sold X Price
VALUE to buyer
Equals
HUMAN CAPITAL ADD
Wages and benefits
What value to
employee?
Pro-good expenditures
What value to society?
Taxation
What value to society?
For products and
energy bought
and this process
Free use of the
commons and
public services
& infrastructure
Degradation
of land
Water scarcity
and degradation
Air pollution:
Impact on people
Air pollution:
Impact on climate
Air pollution:
Impact on people
Solid waste
Resource
depletion
Environmental
Degradation
POSITIVE
IMPACT NOT
ACCOUNTED
FOR
Negative
impact
File: MDIA-Framework-004-150411-WIP.odp Peter Burgess (c) All rights reserved
Financial
Capital
Human
Capital
Man Built
Structures
& Systems
Natural
Capital
Sun Sun
Financial
Capital
Human
Capital
Man Built
Structures
& Systems
Natural
Capital
Sun

34. MULTI DIMENSION IMPACT ACCOUNTING
ACTIVITIES OF AN INDIVIDUAL
Input of
Human
Capital:
Time, Effort,
Skill, Ability,
Knowledge
Improves
Society
Improves
MBSS
Pro Good
Activities
Buy and Use
PRODUCTS
e.g. Food, Energy
Shelter, Transport
Pro Money
Activities
e.g. Paid Work
Non-Impact
Recreation
Financial
Capital
Human
Capital
Man Built
Structures
& Systems
Natural
Capital
Sun
Financial
Capital
Human
Capital
Man Built
Structures
& Systems
Natural
Capital
Sun
Improves
QoL and
Human
Capital
WASTE
Liquid
Gases
Solids
Natural
Capital
Depleted
Maybe
improves
FC in HC
Financial
Capital
Human
Capital
Man Built
Structures
& Systems
Natural
Capital
Sun
INPUTS ACTIVITIES BAD
Impact
State-EOPState-BOP
GOOD
Impact
Use of
MBSS
Use of
Natural
Capital
Use of Solar

35. MULTI DIMENSION IMPACT ACCOUNTING
Job-Money Work
Housing
Health
Time
Skills
Income
Recreation
Education
ProGood Work
Energy
PLUS opportunities
Improves
society
Food
Clothes
Resource
Depletion
Environmental
Degradation
BOP EOPThe Individual
File: MDIA-Framework-004-150411-WIP.odp Peter Burgess (c) All rights reserved
Sun
BOP
Financial
Capital
Human
Capital
Man Built
Structures
& Systems
Natural
Capital
Sun
PERSONAL
ASSETS
Energy
Health
Enjoyment
Skills
Experience
Family
Shelter
Friends
Money
Stuff
QUALITY
OF LIFE
Sun
Financial
Capital
Human
Capital
Man Built
Structures
& Systems
Natural
Capital
Sun
PERSONAL
ASSETS
Energy
Health
Enjoyment
Skills
Experience
Family
Shelter
Friends
Money
Stuff
QUALITY
OF LIFE
PRODUCTS
use MBSS
PRODUCTS
Impact NC
PRODUCTS
Use
MBSS
PRODUCTS
improve QOL

36. MULTI DIMENSION IMPACT ACCOUNTING
Sun
FOOD
Activities
Individual
QoL
Individual
QoL
Use of Pesticides
Use of Land
The IMPACT of FOOD
Use of Water
Use of Fertilizers
Air Pollution
Use of Growth Hormones
and Antibiotics
Use of Energy
Use of Equipment
Use of Labor Inputs
Money Price
Money Profit
Money Cost
True Value
Value Add
True Cost
File: MDIA-Framework-004-150411-WIP.odp Peter Burgess (c) All rights reserved
Sun
BOP
Financial
Capital
Human
Capital
Man Built
Structures
& Systems
Natural
Capital
Sun SunSun
EOP
Financial
Capital
Human
Capital
Man Built
Structures
& Systems
Natural
Capital
Sun

37. MULTI DIMENSION IMPACT ACCOUNTING
Sun
LAND USE
Sustainable agriculture
Water purification
About LAND USE
Wetlands
Intensive monoculture
Coastal mangrove
Urban infrastructure
Roads, Parking Lots
There is a limited amount of land
There are multiple possible uses
Money Profit
Land is a factor
in improving
human capital,
producing goods
and services,
locating MBSS,
and providing
very critical
ecosystem
services
Suburban sprawl
Housing
Tropical forest
Habitat
Industrial operations
File: MDIA-Framework-004-150411-WIP.odp Peter Burgess (c) All rights reserved
Sun
BOP
Financial
Capital
Human
Capital
Man Built
Structures
& Systems
Natural
Capital
Sun SunSun
EOP
Financial
Capital
Human
Capital
Man Built
Structures
& Systems
Natural
Capital
Sun

38. MULTI DIMENSION IMPACT ACCOUNTING
Sun
WATER USE
Food production
uses water
Beverage production
uses water
About WATER USE
Water is essential to LIFE
Nothing is more important
Household water
use essential
Industrial processes
use water
Rainfall and fresh
water are abundant
in some places
but not everywhere
Household waste
also pollutes
Waste water pollution
from processes
a critical issue
Important for
all processes to
treat water before
discharge
Water is abundant,
but most has too
much dissolved
salts to be potable
File: MDIA-Framework-004-150411-WIP.odp Peter Burgess (c) All rights reserved
Sun
BOP
Financial
Capital
Human
Capital
Man Built
Structures
& Systems
Natural
Capital
Sun SunSun
EOP
Financial
Capital
Human
Capital
Man Built
Structures
& Systems
Natural
Capital
Sun

39. MULTI DIMENSION IMPACT ACCOUNTING
Sun
EMISSIONS
SO2 … acid rain
CO2-Greenhouse Gas
About ATMOSPHERIC POLLUTION
Air pollution has many forms, all of which are
more or less detrimental to people and planet
Particulates
MH4-Methane-GHG
Some emissions
have a direct
impact on health
Nitrous oxides
Freon-ozone layer
damage
Some emissions
are greenhouse
gases that cause
global warming
The atmosphere is
not an infinite free
dump for undesirable
and toxic emissions
All emissions
have a cost
File: MDIA-Framework-004-150411-WIP.odp Peter Burgess (c) All rights reserved
Sun
BOP
Financial
Capital
Human
Capital
Man Built
Structures
& Systems
Natural
Capital
Sun SunSun
EOP
Financial
Capital
Human
Capital
Man Built
Structures
& Systems
Natural
Capital
Sun

40. MULTI DIMENSION IMPACT ACCOUNTING
MBSS
Man-Built
Structures
& Systems
Sun
Natural
Capital
FINANCIAL
ACCOUNTSHuman
Capital
MBSS
Man-Built
Structures
& Systems
Sun
Natural
Capital
Human
Capital
Economic Activity … Process Accounts
REVENUES
Products Sold X Price
Products Bought X Price
BOP EOP
Energy Bought X Price
Employee Benefits
Employee Payroll
Other expenditures
Asset use costs
Depreciation
Financial expenses
Pro-good expenditures
Taxation
Profit
REVENUES
Products Sold X Price
VALUE to buyer
Equals
HUMAN CAPITAL ADD
Wages and benefits
What value to
employee?
Pro-good expenditures
What value to society?
Taxation
What value to society?
For products and
energy bought
and this process
Free use of the
commons and
public services
& infrastructure
Degradation
of land
Water scarcity
and degradation
Air pollution:
Impact on people
Air pollution:
Impact on climate
Air pollution:
Impact on people
Solid waste
Resource
depletion
Environmental
Degradation
POSITIVE
IMPACT NOT
ACCOUNTED
FOR
Negative
impact
File: MDIA-Framework-004-150411-WIP.odp Peter Burgess (c) All rights reserved

41. MULTI DIMENSION IMPACT ACCOUNTING
Sun
FINANCIAL
ACCOUNTS
Economic Activity … Process Accounts
REVENUES
Products Sold X Price
Products Bought X Price
BOP EOP
Energy Bought X Price
Employee Benefits
Employee Payroll
Other expenditures
Asset use costs
Depreciation
Financial expenses
Pro-good expenditures
Taxation
Profit
File: MDIA-Framework-004-150411-WIP.odp Peter Burgess (c) All rights reserved
Sun
Financial
Capital
Human
Capital
Man Built
Structures
& Systems
Natural
Capital
Sun SunSun
Financial
Capital
Human
Capital
Man Built
Structures
& Systems
Natural
Capital
Sun

42. MULTI DIMENSION IMPACT ACCOUNTING
MBSS
Natural
Capital
Human
Capital
PRODUCT … the SUPPLY CHAIN
IMPACT ACCOUNTING ADJUSTMENTS
Zero to start
Costs this stage
Profit this stage
Price this stage
FINANCIAL
ACCOUNTS
Zero to start
Costs this stage
Profit this stage
Price Stage 1
FINANCIAL ACCOUNTS EACH STEP OF THE SUPPLY CHAIN
Cost =
Price stage 1
Costs Stage 2
Profit Stage 2
Impact
Stage 1
Impact
Stage 1
Impact
Stage 1
Cum Costs
Cum Profit
Price Stage 2
Impact
Stage 2
Impact
Stage 2
Impact
Stage 2
Cum
Impact
Cum
Impact
Cum
Impact
Cost =
Price stage 2
Costs Stage 3
Profit Stage 3
Cum Costs
Cum Profit
Price Stage 3
Impact
Stage 3
Impact
Stage 3
Impact
Stage 3
Cum
Impact
Cum
Impact
Cum
Impact
Financial
Dimension
File: MDIA-Framework-004-150411-WIP.odp Peter Burgess (c) All rights reserved

43. MULTI DIMENSION IMPACT ACCOUNTING
MBSS
Natural
Capital
Human
Capital
PLACE … Where people live and work … where impact can be seen
IMPACT ACCOUNTING ADJUSTMENTS
Zero to start
Costs this stage
Profit this stage
Price this stage
FINANCIAL
ACCOUNTS
Zero to start
Costs this stage
Profit this stage
Price Stage 1
FINANCIAL ACCOUNTS EACH STEP OF THE SUPPLY CHAIN
Impact
Stage 1
Impact
Stage 1
Impact
Stage 1
Financial
Dimension
File: MDIA-Framework-004-150411-WIP.odp Peter Burgess (c) All rights reserved

44. MULTI DIMENSION IMPACT ACCOUNTING
File: MDIA-Framework-004-150411-WIP.odp Peter Burgess (c) All rights reserved

45. MULTI DIMENSION IMPACT ACCOUNTING