02:08 PM
peterbnyc@gmail.com
www.truevaluemetrics.org
MULTI DIMENSION IMPACT ACCOUNTING (MDIA)
MDIA Analysis of
an Economi...
02:08 PM
MULTI DIMENSION IMPACT ACCOUNTING (MDIA)
My 'ah-ha' moment was when I became clear
about the difference between t...
02:08 PM
MULTI DIMENSION IMPACT ACCOUNTING (MDIA)
My 'ah-ha' moment was when I became clear
about the difference between t...
02:08 PM
MULTI DIMENSION IMPACT ACCOUNTING (MDIA)
My 'ah-ha' moment was when I became clear
about the difference between t...
02:08 PM
MULTI DIMENSION IMPACT ACCOUNTING (MDIA)
My 'ah-ha' moment was when I became clear
about the difference between t...
02:08 PM
MULTI DIMENSION IMPACT ACCOUNTING (MDIA)
My 'ah-ha' moment was when I became clear
about the difference between t...
02:08 PM
MULTI DIMENSION IMPACT ACCOUNTING (MDIA)
My 'ah-ha' moment was when I became clear
about the difference between t...
02:08 PM
MULTI DIMENSION IMPACT ACCOUNTING (MDIA)
These are the money accounting elements:
●
Cost …........ cost of sales
...
02:08 PM
MULTI DIMENSION IMPACT ACCOUNTING (MDIA)
These are the money accounting elements:
●
Cost …........ cost of sales
...
02:08 PM
MULTI DIMENSION IMPACT ACCOUNTING (MDIA)
Payroll … a cost for business
Every business person understands that in ...
02:08 PM
MULTI DIMENSION IMPACT ACCOUNTING (MDIA)
Payroll … a cost for business
Every business person understands that in ...
02:08 PM
MULTI DIMENSION IMPACT ACCOUNTING (MDIA)
Payroll … Impact for people and society
But the benefits derived from pa...
02:08 PM
MULTI DIMENSION IMPACT ACCOUNTING (MDIA)
Payroll … Impact for people and society
But the benefits derived from pa...
02:08 PM
MULTI DIMENSION IMPACT ACCOUNTING (MDIA)
Purchased materials
For the organization, purchased materials have a mon...
02:08 PM
MULTI DIMENSION IMPACT ACCOUNTING (MDIA)
Purchased materials
For the organization, purchased materials have a mon...
02:08 PM
MULTI DIMENSION IMPACT ACCOUNTING (MDIA)
Products sold
For the organization, in the money accounting, the product...
02:08 PM
MULTI DIMENSION IMPACT ACCOUNTING (MDIA)
Products bought
For a consumer, the price paid is the main metric.
The c...
02:08 PM
MULTI DIMENSION IMPACT ACCOUNTING (MDIA)
Products bought
For a consumer, the price paid is the main metric.
The c...
02:08 PM
MULTI DIMENSION IMPACT ACCOUNTING (MDIA)
Products bought
For a consumer, the price paid is the main metric.
The c...
02:08 PM
MULTI DIMENSION IMPACT ACCOUNTING (MDIA)
Products bought
For a consumer, the price paid is the main metric.
The c...
02:08 PM
MULTI DIMENSION IMPACT ACCOUNTING (MDIA)
Energy used
Energy is a critical input for the modern economy.
In the Un...
02:08 PM
MULTI DIMENSION IMPACT ACCOUNTING (MDIA)
Energy used
Energy is a critical input for the modern economy.
In the Un...
02:08 PM
MULTI DIMENSION IMPACT ACCOUNTING (MDIA)
Energy used
Energy is a critical input for the modern economy.
In the Un...
02:08 PM
MULTI DIMENSION IMPACT ACCOUNTING (MDIA)
Energy used
While energy is a critical input for the modern economy,
fos...
02:08 PM
MULTI DIMENSION IMPACT ACCOUNTING (MDIA)
Energy used
While energy is a critical input for the modern economy,
fos...
02:08 PM
MULTI DIMENSION IMPACT ACCOUNTING (MDIA)
Energy used
While energy is a critical input for the modern economy,
fos...
02:08 PM
MULTI DIMENSION IMPACT ACCOUNTING (MDIA)
May 2014
QUESTIONS? FEEDBACK?
peterbnyc@gmail.com
www.truevaluemetrics.o...
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Analysis of an Economic Activity (140517)

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Quality of life and standard of living are enabled by economic activities. Cost, price and value are important metrics in understanding an economic activity. In turn these are used to determine profit and valuadd. In MDIA there are also the roles played by payroll and products in the socio-economic system and the impacts there are on people and planet.
Tags: accounting, economics, metrics, triple bottom line, sustainability, green accounting, environment, people, social impact, community, Burgess, MDIA, TrueValueMetrics

Published in: Economy & Finance, Technology
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Analysis of an Economic Activity (140517)

  1. 1. 02:08 PM peterbnyc@gmail.com www.truevaluemetrics.org MULTI DIMENSION IMPACT ACCOUNTING (MDIA) MDIA Analysis of an Economic Activity @truevaluemetric
  2. 2. 02:08 PM MULTI DIMENSION IMPACT ACCOUNTING (MDIA) My 'ah-ha' moment was when I became clear about the difference between these three ideas: Cost C:TVMwebsiteWebsiteTrueValueMetricsOrgTVM-papersMDIA-DiagramsMDIA-Pres-B-Analysis-of-an-Economic-Activity-140517.odp Analysis of an Economic Activity
  3. 3. 02:08 PM MULTI DIMENSION IMPACT ACCOUNTING (MDIA) My 'ah-ha' moment was when I became clear about the difference between these three ideas: Cost, Price Analysis of an Economic Activity C:TVMwebsiteWebsiteTrueValueMetricsOrgTVM-papersMDIA-DiagramsMDIA-Pres-B-Analysis-of-an-Economic-Activity-140517.odp
  4. 4. 02:08 PM MULTI DIMENSION IMPACT ACCOUNTING (MDIA) My 'ah-ha' moment was when I became clear about the difference between these three ideas: Cost, Price, and Value. Analysis of an Economic Activity C:TVMwebsiteWebsiteTrueValueMetricsOrgTVM-papersMDIA-DiagramsMDIA-Pres-B-Analysis-of-an-Economic-Activity-140517.odp
  5. 5. 02:08 PM MULTI DIMENSION IMPACT ACCOUNTING (MDIA) My 'ah-ha' moment was when I became clear about the difference between these three ideas: Cost, Price, and Value. The way cost and price are used incorrectly in the media is appalling, and as a result much of the discussion of important issues is not at all useful. Analysis of an Economic Activity C:TVMwebsiteWebsiteTrueValueMetricsOrgTVM-papersMDIA-DiagramsMDIA-Pres-B-Analysis-of-an-Economic-Activity-140517.odp
  6. 6. 02:08 PM MULTI DIMENSION IMPACT ACCOUNTING (MDIA) My 'ah-ha' moment was when I became clear about the difference between these three ideas: Cost, Price, and Value. The way cost and price are used incorrectly in the media is appalling, and as a result much of the discussion of important issues is not at all useful. For example: Much of the discussion of the 'cost' of healthcare is really to do with the price of healthcare Analysis of an Economic Activity C:TVMwebsiteWebsiteTrueValueMetricsOrgTVM-papersMDIA-DiagramsMDIA-Pres-B-Analysis-of-an-Economic-Activity-140517.odp
  7. 7. 02:08 PM MULTI DIMENSION IMPACT ACCOUNTING (MDIA) My 'ah-ha' moment was when I became clear about the difference between these three ideas: Cost, Price, and Value. The way cost and price are used incorrectly in the media is appalling, and as a result much of the discussion of important issues is not at all useful. For example: Much of the discussion of the 'cost' of healthcare is really to do with the price of healthcare. It was back in the 1980s that I first expressed the idea that the biggest 'cost' in modern business and for society in general and the economy is 'profit'! Analysis of an Economic Activity C:TVMwebsiteWebsiteTrueValueMetricsOrgTVM-papersMDIA-DiagramsMDIA-Pres-B-Analysis-of-an-Economic-Activity-140517.odp
  8. 8. 02:08 PM MULTI DIMENSION IMPACT ACCOUNTING (MDIA) These are the money accounting elements: ● Cost …........ cost of sales ● Price …........ revenue ● Difference … profit These are the value elements of MDIA: ● Value consumed; ● Value produced / realized ● Valuadd Value is, of course, a multi-dimensional idea! Analysis of an Economic Activity C:TVMwebsiteWebsiteTrueValueMetricsOrgTVM-papersMDIA-DiagramsMDIA-Pres-B-Analysis-of-an-Economic-Activity-140517.odp
  9. 9. 02:08 PM MULTI DIMENSION IMPACT ACCOUNTING (MDIA) These are the money accounting elements: ● Cost …........ cost of sales ● Price …........ revenue ● Difference … profit These are the value elements of MDIA: ● Value consumed; ● Value produced / realized ● Valuadd Value is, of course, a multi-dimensional idea! Work by PwC in the UK is going in the same direction, but broadly from an organization-centric perspective. Analysis of an Economic Activity C:TVMwebsiteWebsiteTrueValueMetricsOrgTVM-papersMDIA-DiagramsMDIA-Pres-B-Analysis-of-an-Economic-Activity-140517.odp
  10. 10. 02:08 PM MULTI DIMENSION IMPACT ACCOUNTING (MDIA) Payroll … a cost for business Every business person understands that in the money profit accounts, the cost of payroll is an expense that reduces the profits. Analysis of an Economic Activity C:TVMwebsiteWebsiteTrueValueMetricsOrgTVM-papersMDIA-DiagramsMDIA-Pres-B-Analysis-of-an-Economic-Activity-140517.odp
  11. 11. 02:08 PM MULTI DIMENSION IMPACT ACCOUNTING (MDIA) Payroll … a cost for business Every business person understands that in the money profit accounts, the cost of payroll is an expense that reduces the profits. When productivity improvement makes it possible to reduce the payroll, the the profits go up. Analysis of an Economic Activity C:TVMwebsiteWebsiteTrueValueMetricsOrgTVM-papersMDIA-DiagramsMDIA-Pres-B-Analysis-of-an-Economic-Activity-140517.odp
  12. 12. 02:08 PM MULTI DIMENSION IMPACT ACCOUNTING (MDIA) Payroll … Impact for people and society But the benefits derived from payroll are in society as well as in the business. Analysis of an Economic Activity C:TVMwebsiteWebsiteTrueValueMetricsOrgTVM-papersMDIA-DiagramsMDIA-Pres-B-Analysis-of-an-Economic-Activity-140517.odp
  13. 13. 02:08 PM MULTI DIMENSION IMPACT ACCOUNTING (MDIA) Payroll … Impact for people and society But the benefits derived from payroll are in society as well as in the business. The impact on the individual when he/she loses his/her job and no longer is earning $40,000 a year is bigger than the impact on the business profit. The individual and the family are not getting an amount of $40,000 from the job remuneration. The community does not have this money flowing through the local businesses. The profit of the organization has increased by some amount … $20,000 (that is $40,000 less (say) $20,000 (the annualized cost of the productivity improvement investment The negative impact on society is $200,000 made up as follows: * The impact on the individual … $40,000; * The impact on the family … $40,000 ; and * The local multiplier impact on the community (probably between 2 and 4 (say 3) … $120,000 Analysis of an Economic Activity C:TVMwebsiteWebsiteTrueValueMetricsOrgTVM-papersMDIA-DiagramsMDIA-Pres-B-Analysis-of-an-Economic-Activity-140517.odp
  14. 14. 02:08 PM MULTI DIMENSION IMPACT ACCOUNTING (MDIA) Purchased materials For the organization, purchased materials have a money cost, and this cost reduces profit by the money cost of the purchases. Efficient processes and product design reduces this cost and increases profit. Analysis of an Economic Activity C:TVMwebsiteWebsiteTrueValueMetricsOrgTVM-papersMDIA-DiagramsMDIA-Pres-B-Analysis-of-an-Economic-Activity-140517.odp
  15. 15. 02:08 PM MULTI DIMENSION IMPACT ACCOUNTING (MDIA) Purchased materials For the organization, purchased materials have a money cost, and this cost reduces profit by the money cost of the purchases. Efficient processes and product design reduces this cost and increases profit. But purchased materials also carry within them the whole history of the supply chain which must be taken into account. This may be done using a trucost standard values. These incorporate the value (supply) chain profile for each purchased material. For MDIA there is the comprehensive 'value consumption' metrics rather than simply 'money cost'. Analysis of an Economic Activity C:TVMwebsiteWebsiteTrueValueMetricsOrgTVM-papersMDIA-DiagramsMDIA-Pres-B-Analysis-of-an-Economic-Activity-140517.odp
  16. 16. 02:08 PM MULTI DIMENSION IMPACT ACCOUNTING (MDIA) Products sold For the organization, in the money accounting, the products sold have a price, which translates into revenue. There is also money based cost of sales and a computed gross margin and profit. These products sold also carry within them the whole history of the supply chain to this point. From this it is possible to determine the impact on people and planet associated with each product. There is a positive social impact embedded in the product as a result of jobs and pay. This may be offsets because of dangerous workplace conditions and other issues. There is a negative impact in the supply chain because of impact on the environment * Resource depletion … * Environmental degradation … associated with extraction * Environmental degradation … associated with transportation * Environmental degradation … associated with refining * Environmental degradation … associated with burning fuels Analysis of an Economic Activity C:TVMwebsiteWebsiteTrueValueMetricsOrgTVM-papersMDIA-DiagramsMDIA-Pres-B-Analysis-of-an-Economic-Activity-140517.odp
  17. 17. 02:08 PM MULTI DIMENSION IMPACT ACCOUNTING (MDIA) Products bought For a consumer, the price paid is the main metric. The consumer is willing to pay the price because they think that the 'value' of the product is higher than the price. Analysis of an Economic Activity C:TVMwebsiteWebsiteTrueValueMetricsOrgTVM-papersMDIA-DiagramsMDIA-Pres-B-Analysis-of-an-Economic-Activity-140517.odp
  18. 18. 02:08 PM MULTI DIMENSION IMPACT ACCOUNTING (MDIA) Products bought For a consumer, the price paid is the main metric. The consumer is willing to pay the price because they think that the 'value' of the product is higher than the price. Usually a consumer does not give much thought to the 'trucost' of the product. Trucost is a cost that goes beyond just money transactions, but incorporate externalities that have impact on people and planet. This is not part of the 'conversation”! Analysis of an Economic Activity C:TVMwebsiteWebsiteTrueValueMetricsOrgTVM-papersMDIA-DiagramsMDIA-Pres-B-Analysis-of-an-Economic-Activity-140517.odp
  19. 19. 02:08 PM MULTI DIMENSION IMPACT ACCOUNTING (MDIA) Products bought For a consumer, the price paid is the main metric. The consumer is willing to pay the price because they think that the 'value' of the product is higher than the price. Usually a consumer does not give much thought to the 'trucost' of the product. Trucost is a cost that goes beyond just money transactions, but incorporate externalities that have impact on people and planet. This is not part of the 'conversation”! The perceived 'value' of the product would be different if the 'trucost' of the product was easily and generally accessible as easily as everything else associated with selling the product. Analysis of an Economic Activity C:TVMwebsiteWebsiteTrueValueMetricsOrgTVM-papersMDIA-DiagramsMDIA-Pres-B-Analysis-of-an-Economic-Activity-140517.odp
  20. 20. 02:08 PM MULTI DIMENSION IMPACT ACCOUNTING (MDIA) Products bought For a consumer, the price paid is the main metric. The consumer is willing to pay the price because they think that the 'value' of the product is higher than the price. Usually a consumer does not give much thought to the 'trucost' of the product. Trucost is a cost that goes beyond just money transactions, but incorporate externalities that have impact on people and planet. This is not part of the 'conversation”! The perceived 'value' of the product would be different if the 'trucost' of the product was easily and generally accessible as easily as everything else associated with selling the product. The key to this is 'easy'. Price is easy. Advertising makes perceived value 'easy'. MDIA's standard values has to make the 'trucost' value easy! Analysis of an Economic Activity C:TVMwebsiteWebsiteTrueValueMetricsOrgTVM-papersMDIA-DiagramsMDIA-Pres-B-Analysis-of-an-Economic-Activity-140517.odp
  21. 21. 02:08 PM MULTI DIMENSION IMPACT ACCOUNTING (MDIA) Energy used Energy is a critical input for the modern economy. In the United States per capita GDP is around $50,000 and per capita carbon emissions associated with energy use is around 20 tons CO2e. In Europe the same GDP of around $50,000 is associated with carbon emissions of around 8 tons CO2e. Analysis of an Economic Activity C:TVMwebsiteWebsiteTrueValueMetricsOrgTVM-papersMDIA-DiagramsMDIA-Pres-B-Analysis-of-an-Economic-Activity-140517.odp
  22. 22. 02:08 PM MULTI DIMENSION IMPACT ACCOUNTING (MDIA) Energy used Energy is a critical input for the modern economy. In the United States per capita GDP is around $50,000 and per capita carbon emissions associated with energy use is around 20 tons CO2e. In Europe the same GDP of around $50,000 is associated with carbon emissions of around 8 tons CO2e. This shows: 1) energy is a very important input 2) relative to Europe, the United States is wasteful and/or terribly inefficient. This shows also the importance of energy policy. The US has had a low price low tax policy for energy. Europe has had a high price high tax energy regime. Analysis of an Economic Activity C:TVMwebsiteWebsiteTrueValueMetricsOrgTVM-papersMDIA-DiagramsMDIA-Pres-B-Analysis-of-an-Economic-Activity-140517.odp
  23. 23. 02:08 PM MULTI DIMENSION IMPACT ACCOUNTING (MDIA) Energy used Energy is a critical input for the modern economy. In the United States per capita GDP is around $50,000 and per capita carbon emissions associated with energy use is around 20 tons CO2e. In Europe the same GDP of around $50,000 is associated with carbon emissions of around 8 tons CO2e. This shows: 1) energy is a very important input 2) relative to Europe, the United States is wasteful and/or terribly inefficient. This shows also the importance of energy policy. The US has had a low price low tax policy for energy. Europe has had a high price high tax energy regime. In the end, the United States is at a global disadvantage. Analysis of an Economic Activity C:TVMwebsiteWebsiteTrueValueMetricsOrgTVM-papersMDIA-DiagramsMDIA-Pres-B-Analysis-of-an-Economic-Activity-140517.odp
  24. 24. 02:08 PM MULTI DIMENSION IMPACT ACCOUNTING (MDIA) Energy used While energy is a critical input for the modern economy, fossil fuels have a significant negative impact on the environment. These include: * Resource depletion … * Environmental degradation … associated with extraction * Environmental degradation … associated with transportation * Environmental degradation … associated with refining * Environmental degradation … associated with burning fuels Analysis of an Economic Activity C:TVMwebsiteWebsiteTrueValueMetricsOrgTVM-papersMDIA-DiagramsMDIA-Pres-B-Analysis-of-an-Economic-Activity-140517.odp
  25. 25. 02:08 PM MULTI DIMENSION IMPACT ACCOUNTING (MDIA) Energy used While energy is a critical input for the modern economy, fossil fuels have a significant negative impact on the environment. These include: * Resource depletion … * Environmental degradation … associated with extraction * Environmental degradation … associated with transportation * Environmental degradation … associated with refining * Environmental degradation … associated with burning fuels The negative impact on society of renewable energy sources is negligible compared to fossil fuels. The world needs to embrace a paradigm change for energy so that renewable energy becomes the norm rather than the exception. Analysis of an Economic Activity C:TVMwebsiteWebsiteTrueValueMetricsOrgTVM-papersMDIA-DiagramsMDIA-Pres-B-Analysis-of-an-Economic-Activity-140517.odp
  26. 26. 02:08 PM MULTI DIMENSION IMPACT ACCOUNTING (MDIA) Energy used While energy is a critical input for the modern economy, fossil fuels have a significant negative impact on the environment. These include: * Resource depletion … * Environmental degradation … associated with extraction * Environmental degradation … associated with transportation * Environmental degradation … associated with refining * Environmental degradation … associated with burning fuels The negative impact on society of renewable energy sources is negligible compared to fossil fuels. The world needs to embrace a paradigm change for energy so that renewable energy becomes the norm rather than the exception. Enough solar energy hits the planet every hour to power the present energy intensive economy for a year! Analysis of an Economic Activity C:TVMwebsiteWebsiteTrueValueMetricsOrgTVM-papersMDIA-DiagramsMDIA-Pres-B-Analysis-of-an-Economic-Activity-140517.odp
  27. 27. 02:08 PM MULTI DIMENSION IMPACT ACCOUNTING (MDIA) May 2014 QUESTIONS? FEEDBACK? peterbnyc@gmail.com www.truevaluemetrics.org @truevaluemetric C:TVMwebsiteWebsiteTrueValueMetricsOrgTVM-papersMDIA-DiagramsMDIA-Pres-B-Analysis-of-an-Economic-Activity-140517.odp
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