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MULTI DIMENSION IMPACT ACCOUNTING
File: MDIA-Framework-004-150411-WIP.odp Peter Burgess (c) All rights reserved
MDIA
Core ...
MDIA CORE CONCEPTS
Uses key concepts from accountancy;
● Double Entry
● Balance Sheets and the Profit and Loss Account
● S...
Double Entry Accounting
● Double Entry Accounting is the core
strength of a good accounting system;
● Every money transact...
State, Process and Flow
● State;
● Process; and
● Flow.
MULTI DIMENSION IMPACT ACCOUNTING
MULTI DIMENSION IMPACT ACCOUNTING
MULTI DIMENSION IMPACT ACCOUNTING
MULTI DIMENSION IMPACT ACCOUNTING
MULTI DIMENSION IMPACT ACCOUNTING
State, Progess and Performance
● State is the Balance Sheet of the entity
at a moment in time;
● Progress may be measured ...
Cost, Price and Value
● There should be clarity about what is cost
and what is price;
● A buy/sell transaction takes place...
Quantification / Standard Value
● Quantification
● Standard Value;
●
MULTI DIMENSION IMPACT ACCOUNTING
Data at the Center
● Data at the Center;
●
MULTI DIMENSION IMPACT ACCOUNTING
Beyond the Reporting Entity
● Beyond the Reporting Entity
MULTI DIMENSION IMPACT ACCOUNTING
Amazing complexity …
● Global North/Global South/Community
● Big Organizations - National and
International / Small commun...
MULTI DIMENSION IMPACT ACCOUNTING
MULTI DIMENSION IMPACT ACCOUNTING
MULTI DIMENSION IMPACT ACCOUNTING
Feedback
● Feedback is best when it is fast
and very focused on practical
actionable response
● In this example feedback h...
MULTI DIMENSION IMPACT ACCOUNTING
Malaria in the community
● Get data / facts about malaria in the community
● This becomes the STATE – BOP*
● PLAN malaria ...
MULTI DIMENSION IMPACT ACCOUNTING
Next 2 slides
● The first slide is a simplified representation of
the State – Flow – State idea for ALL elements
of the So...
MULTI DIMENSION IMPACT ACCOUNTING
File: MDIA-Framework-004-150411-WIP.odp Peter Burgess (c) All rights reserved
MULTI DIMENSION IMPACT ACCOUNTING
The makeup of:
● Human Capital;
● Financial Capital;
● MBSS*; and
● Natural Capital
MULTI DIMENSION IMPACT ACCOUNTING
* MB...
MULTI DIMENSION IMPACT ACCOUNTING
ELEMENTS OF THE SYSTEM by SEGMENT
Financial
Capital
Human
Capital
Man Built
Structures
&...
STATE – FLOW (activities) – STATE
● Financial Capital;
● Human Capital;
● MBSS*;
● Natural Capital;
● Sun
MULTI DIMENSION ...
MULTI DIMENSION IMPACT ACCOUNTING
Resource
Depletion
Environment
Degradation
Improves
QoL
Super Rich
Affluent
BoP
Industri...
The next 4 slides
STATE BOP … ACTIVITY ACCOUNTING … STATE EOP
● Financial accounting:
● Financial accounting plus GOOD imp...
MULTI DIMENSION IMPACT ACCOUNTING
Sun
FINANCIAL
ACCOUNTS
Financial Accounts describe Economic Activity
REVENUES
Products S...
MULTI DIMENSION IMPACT ACCOUNTING
Sun
FINANCIAL
ACCOUNTS
ADD positive impact not accounted for
REVENUES
Products Sold X Pr...
MULTI DIMENSION IMPACT ACCOUNTING
Sun
FINANCIAL
ACCOUNTS
DEDUCT negative impact not accounted for
REVENUES
Products Sold X...
MULTI DIMENSION IMPACT ACCOUNTING
Sun
FINANCIAL
ACCOUNTS
ACCOUNTING FOR EVERYTHING
REVENUES
Products Sold X Price
Products...
MULTI DIMENSION IMPACT ACCOUNTING
ACTIVITIES OF AN INDIVIDUAL
Input of
Human
Capital:
Time, Effort,
Skill, Ability,
Knowle...
MULTI DIMENSION IMPACT ACCOUNTING
Job-Money Work
Housing
Health
Time
Skills
Income
Recreation
Education
ProGood Work
Energ...
MULTI DIMENSION IMPACT ACCOUNTING
Sun
FOOD
Activities
Individual
QoL
Individual
QoL
Use of Pesticides
Use of Land
The IMPA...
MULTI DIMENSION IMPACT ACCOUNTING
Sun
LAND USE
Sustainable agriculture
Water purification
About LAND USE
Wetlands
Intensiv...
MULTI DIMENSION IMPACT ACCOUNTING
Sun
WATER USE
Food production
uses water
Beverage production
uses water
About WATER USE
...
MULTI DIMENSION IMPACT ACCOUNTING
Sun
EMISSIONS
SO2 … acid rain
CO2-Greenhouse Gas
About ATMOSPHERIC POLLUTION
Air polluti...
MULTI DIMENSION IMPACT ACCOUNTING
MBSS
Man-Built
Structures
& Systems
Sun
Natural
Capital
FINANCIAL
ACCOUNTSHuman
Capital
...
MULTI DIMENSION IMPACT ACCOUNTING
Sun
FINANCIAL
ACCOUNTS
Economic Activity … Process Accounts
REVENUES
Products Sold X Pri...
MULTI DIMENSION IMPACT ACCOUNTING
MBSS
Natural
Capital
Human
Capital
PRODUCT … the SUPPLY CHAIN
IMPACT ACCOUNTING ADJUSTME...
MULTI DIMENSION IMPACT ACCOUNTING
MBSS
Natural
Capital
Human
Capital
PLACE … Where people live and work … where impact can...
MULTI DIMENSION IMPACT ACCOUNTING
File: MDIA-Framework-004-150411-WIP.odp Peter Burgess (c) All rights reserved
MULTI DIMENSION IMPACT ACCOUNTING
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Mdia p3-01-core-concepts-150420

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Mdia p3-01-core-concepts-150420

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Mdia p3-01-core-concepts-150420

  1. 1. MULTI DIMENSION IMPACT ACCOUNTING File: MDIA-Framework-004-150411-WIP.odp Peter Burgess (c) All rights reserved MDIA Core Concepts
  2. 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. 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. 4. State, Process and Flow ● State; ● Process; and ● Flow. MULTI DIMENSION IMPACT ACCOUNTING
  5. 5. MULTI DIMENSION IMPACT ACCOUNTING
  6. 6. MULTI DIMENSION IMPACT ACCOUNTING
  7. 7. MULTI DIMENSION IMPACT ACCOUNTING
  8. 8. MULTI DIMENSION IMPACT ACCOUNTING
  9. 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. 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. 11. Quantification / Standard Value ● Quantification ● Standard Value; ● MULTI DIMENSION IMPACT ACCOUNTING
  12. 12. Data at the Center ● Data at the Center; ● MULTI DIMENSION IMPACT ACCOUNTING
  13. 13. Beyond the Reporting Entity ● Beyond the Reporting Entity MULTI DIMENSION IMPACT ACCOUNTING
  14. 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. 15. MULTI DIMENSION IMPACT ACCOUNTING
  16. 16. MULTI DIMENSION IMPACT ACCOUNTING
  17. 17. MULTI DIMENSION IMPACT ACCOUNTING
  18. 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. 19. MULTI DIMENSION IMPACT ACCOUNTING
  20. 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. 21. MULTI DIMENSION IMPACT ACCOUNTING
  22. 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. 23. MULTI DIMENSION IMPACT ACCOUNTING File: MDIA-Framework-004-150411-WIP.odp Peter Burgess (c) All rights reserved
  24. 24. MULTI DIMENSION IMPACT ACCOUNTING
  25. 25. The makeup of: ● Human Capital; ● Financial Capital; ● MBSS*; and ● Natural Capital MULTI DIMENSION IMPACT ACCOUNTING * MBSS – Man Built Structures and Systems
  26. 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. 27. STATE – FLOW (activities) – STATE ● Financial Capital; ● Human Capital; ● MBSS*; ● Natural Capital; ● Sun MULTI DIMENSION IMPACT ACCOUNTING * MBSS – Man Built Structures and Systems
  28. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 44. MULTI DIMENSION IMPACT ACCOUNTING File: MDIA-Framework-004-150411-WIP.odp Peter Burgess (c) All rights reserved
  45. 45. MULTI DIMENSION IMPACT ACCOUNTING

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