The value-added statement: An appeal for standardisation

Owing to the absence of accounting standards for the preparation of a value-added statement (VAS), a large variety of methods are used in financial statements. In this study the published value-added statements (PVAS) of companies listed on the JSE Securities Exchange during the period 1976-2005 hav...

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Bibliographic Details
Published inManagement dynamics Vol. 17; no. 1; p. 31
Main Authors Arangies, G, Mlambo, C, Hamman, W D, Steyn-Bruwer, B W
Format Journal Article
LanguageEnglish
Published Stellenbosch Southern African Institute for Management Scientists 01.01.2008
Subjects
Accounting
Economic growth
Economic value added
Employment
Financial statements
GDP
Gross Domestic Product
Growth rate
Inequality
Publishing
Standardization
Studies
Value added
South Africa
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Summary:Owing to the absence of accounting standards for the preparation of a value-added statement (VAS), a large variety of methods are used in financial statements. In this study the published value-added statements (PVAS) of companies listed on the JSE Securities Exchange during the period 1976-2005 have been standardised by the Graduate School of Business of the University of Stellenbosch (USB) in order to quantify the differences between the standardised VAS (SVAS) and the PVAS. These differences consist of the inclusion of items that do not belong in the VAS, items that are erroneously allocated among the distribution to stakeholders, and interpretation differences in whether a certain item forms part of the calculation of value added or the distribution thereof. The greatest difference quantified was the overstatement of the distribution to government that amounted to 54.4% of total differences. For users, including government, to properly calculate and compare the value added of different business entities, a standard for the preparation and presentation of VAS ought to be published. In the South African context the need of a precise measurement of each business entity's contribution to the growth of the national economy is relevant, and this need should also be addressed. [PUBLICATION ABSTRACT]
ISSN:1019-567X