ACC 312 Study Guide - Midterm Guide: Cash Flow Statement
Document Summary
The value added statement, which is an alternative presentation of the traditional profit and loss statement, measures wealth as the value added by the business rather than the profit earned by the business. The value added statement is effectively a rearrangement of the profit and loss account. It shows how value added is distributed among the relevant parties: Government and the amount to provide maintenance and expansion of the business. The value added statement has a number of advantages and disadvantages as a business performance measure. The accounting standards committee in 1975 published the corporate. Eport, (cid:449)hi(cid:272)h des(cid:272)ri(cid:271)ed the (cid:448)alue added state(cid:373)e(cid:374)t as (cid:858)the si(cid:373)plest a(cid:374)d most immediate way of putting profit into a proper perspective vis vis the whole enterprise as a collective effort of capital, management and e(cid:373)ployees(cid:859). The value added statement has certain advantages as a business performance measure:
