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Value Added Accounting and Performance Evaluations
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In practice, accounts have traditionally been prepared for shareholders and creditors. The Corporate Report indentifies certain other user groups whose fortunes are tied up with the success or otherwise of a company. The report has argued that these groups have a right to information and has also advised to widen the responsibility of significant economic entities to report information relevant to their needs. The value added statement shows the income of an entity and its distribution among the people who contribute in its creation. Thus value added statement reveals the income of a team comprising owners, employees, financiers, and government instead of giving emphasis on showing the income of owners only. In other words, income in value added approach includes rewards of a much wider group than just the shareholders.
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