Strengths of Conventional Accounting (140517)

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The basic principles of accountancy and the core conceptual design of the double entry accountancy system are very powerful. These are used as the underlying foundation for MDIA which applies them not only for money profit accounting and reporting, but also for accounting and reporting for impact on people and impact on planet.

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Strengths of Conventional Accounting (140517)

  1. 1. 10:44 PM peterbnyc@gmail.com www.truevaluemetrics.org MULTI DIMENSION IMPACT ACCOUNTING (MDIA) The Strengths of Conventional Accounting @truevaluemetric
  2. 2. 10:44 PM MULTI DIMENSION IMPACT ACCOUNTING (MDIA) Accounting has been very successful over a very long time in organizing large amounts of financial data efficiently to manage large business organizations. Reporting for even very large organizations can be summarized in a simple widely understood manner. MDIA does something very similar for every aspect of the broader society, the economy and the environment. This is shown in the next few slides. C:TVMwebsiteWebsiteTrueValueMetricsOrgTVM-papersMDIA-DiagramsMDIA-Pres-B-Strengths-of-Conventional-Accounting-140517.odp
  3. 3. 10:44 PM MULTI DIMENSION IMPACT ACCOUNTING (MDIA) Accounting is a way to organize very large amounts of financial data very efficiently. C:TVMwebsiteWebsiteTrueValueMetricsOrgTVM-papersMDIA-DiagramsMDIA-Pres-B-Strengths-of-Conventional-Accounting-140517.odp Strengths of Conventional Accounting
  4. 4. 10:44 PM MULTI DIMENSION IMPACT ACCOUNTING (MDIA) Transaction information is organized into 'accounts'. 'Accounts' are either 'balance sheet' accounts or 'profit and loss accounts'. C:TVMwebsiteWebsiteTrueValueMetricsOrgTVM-papersMDIA-DiagramsMDIA-Pres-B-Strengths-of-Conventional-Accounting-140517.odp Strengths of Conventional Accounting
  5. 5. 10:44 PM MULTI DIMENSION IMPACT ACCOUNTING (MDIA) Accounts may be aggregated in order to present summary reports. Conventional accounting has well established rules about how aggregation or consolidation is done. C:TVMwebsiteWebsiteTrueValueMetricsOrgTVM-papersMDIA-DiagramsMDIA-Pres-B-Strengths-of-Conventional-Accounting-140517.odp Strengths of Conventional Accounting
  6. 6. 10:44 PM MULTI DIMENSION IMPACT ACCOUNTING (MDIA) Because of the 'double entry' construct of conventional accounting it is possible to calculate the 'profit' for a period without having all the transaction information. The CHANGE in the balance sheet from the beginning of the period to the end of the period is the same as the PROFIT for the period. C:TVMwebsiteWebsiteTrueValueMetricsOrgTVM-papersMDIA-DiagramsMDIA-Pres-B-Strengths-of-Conventional-Accounting-140517.odp Strengths of Conventional Accounting
  7. 7. 10:44 PM MULTI DIMENSION IMPACT ACCOUNTING (MDIA) Many of methods of recording transactions may also be used for detailed analysis and the creation of 'cost accounts'. There are many varieties of cost accounting. One of the most powerful techniques in cost accounting is the use of 'standard costs' for cost and operational analysis. C:TVMwebsiteWebsiteTrueValueMetricsOrgTVM-papersMDIA-DiagramsMDIA-Pres-B-Strengths-of-Conventional-Accounting-140517.odp Strengths of Conventional Accounting
  8. 8. 10:44 PM MULTI DIMENSION IMPACT ACCOUNTING (MDIA) In conventional accounting, there is a very clear distinction between the accounting and the audit. Audit is never a substitute for accounting. All that audit does is to validate and verify that the accounting and reporting is being done in accordance with the rules. C:TVMwebsiteWebsiteTrueValueMetricsOrgTVM-papersMDIA-DiagramsMDIA-Pres-B-Strengths-of-Conventional-Accounting-140517.odp Strengths of Conventional Accounting
  9. 9. 10:44 PM MULTI DIMENSION IMPACT ACCOUNTING (MDIA) MDIA uses the concepts of conventional accounting in order to build a system for reporting impact on people and planet that is as rigorous as the system used in money profit conventional accounting. C:TVMwebsiteWebsiteTrueValueMetricsOrgTVM-papersMDIA-DiagramsMDIA-Pres-B-Strengths-of-Conventional-Accounting-140517.odp Strengths of Conventional Accounting
  10. 10. 10:44 PM MULTI DIMENSION IMPACT ACCOUNTING (MDIA) May 2014 QUESTIONS? FEEDBACK? peterbnyc@gmail.com www.truevaluemetrics.org @truevaluemetric C:TVMwebsiteWebsiteTrueValueMetricsOrgTVM-papersMDIA-DiagramsMDIA-Pres-B-Strengths-of-Conventional-Accounting-140517.odp

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