mdia p3-01-core-concepts-150420

MULTI DIMENSION IMPACT ACCOUNTING

File: MDIA-Framework-004-150411-WIP.odp Peter Burgess (c) All rights reserved

MDIACore Concepts

MDIA CORE CONCEPTSUses 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.


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;

●


State, Process and Flow

● State;● Process; and● Flow.


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.


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.


Quantification / Standard Value

● Quantification● Standard Value;●


Data at the Center

● Data at the Center;●


Feedback

● Feedback;


Beyond the Reporting Entity

● Beyond the Reporting Entity



COMPONENTS OF THE SYSTEM SEGMENTS

FinancialCapital

HumanCapital

Man BuiltStructures& Systems

NaturalCapital

Sun


FinancialCapital

HumanCapital

Man BuiltStructures & Systems

NaturalCapital

Money Food Government Nature (life)

Sun

Nature (life)

Capital Market Value

Water Laws. Rules Nature (life)Land

Shelter Infrastructure Water

Clothes Industry Nature (life)Air

Health Mining Ecoservices

Education Energy

Skills Waste

Recreation Retail

Culture Logistics

Religion Knowledge

TechnologySecurity


ResourceDepletion

EnvironmentDegradation

ImprovesQoL

Super RichAffluent

BoP

Industrial

MiningEnergy

GovernmentNot-for-ProfitPaperwork

Banking

WaterAir

EcoServicesHabitat

Law

MineralsEnergy

Land


HumanCapital


NaturalCapital

Sun

FinancialCapital

ImprovesEnvironment

MaintainsNatural

Capital andremediates

ProducesProducts

ImprovesQoL

FinancialProgress

Renewables

WasteCreation

HumanCapital


NaturalCapital

Sun

FinancialCapital

Super RichAffluent

BoP

Industrial

MiningEnergy

GovernmentNot-for-ProfitPaperwork

Banking

WaterAir

EcoServicesHabitat

Law

MineralsEnergy

Land

HumanCapital


NaturalCapital

Sun

FinancialCapital

HumanCapital


NaturalCapital

Sun

FinancialCapital


Sun

FINANCIAL ACCOUNTS

Financial Accounts describe Economic Activity

REVENUESProducts 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


Sun

FinancialCapital

HumanCapital


NaturalCapital

Sun SunSun

FinancialCapital

HumanCapital


NaturalCapital

Sun


Sun

FINANCIAL ACCOUNTS

ADD positive impact not accounted for



BOP EOP


Employee Benefits

Employee Payroll

Other expenditures

Asset use costs

Depreciation

Financial expenses


Taxation

Profit


VALUE to buyerEquals

HUMAN CAPITAL ADD

Wages and benefitsWhat value to

employee?

Pro-good expendituresWhat value to society?

TaxationWhat value to society?

POSITIVE IMPACT NOTACCOUNTED

FOR


FinancialCapital

HumanCapital


NaturalCapital

Sun Sun

FinancialCapital

HumanCapital


NaturalCapital

Sun


Sun

FINANCIAL ACCOUNTS

DEDUCT negative impact not accounted for



BOP EOP


Employee Benefits

Employee Payroll

Other expenditures

Asset use costs

Depreciation

Financial expenses


Taxation

Profit

For products andenergy bought

and this process

Free use of thecommons andpublic services& infrastructure

Degradationof land

Water scarcityand degradationAir pollution:

Impact on peopleAir pollution:

Impact on climate

Air pollution:Impact on people

Solid waste

Resourcedepletion

Environmental Degradation

Negativeimpact


FinancialCapital

HumanCapital


NaturalCapital

Sun Sun

FinancialCapital

HumanCapital


NaturalCapital

Sun


Sun

FINANCIAL ACCOUNTS

ACCOUNTING FOR EVERYTHING



BOP EOP


Employee Benefits

Employee Payroll

Other expenditures

Asset use costs

Depreciation

Financial expenses


Taxation

Profit



HUMAN CAPITAL ADD


employee?




and this process


Degradationof land



Impact on climate


Solid waste

Resourcedepletion



FOR

Negativeimpact


FinancialCapital

HumanCapital


NaturalCapital

Sun Sun

FinancialCapital

HumanCapital


NaturalCapital

Sun


IMPACT OF THE ACTIVITIES OF AN INDIVIDUAL

InputTimeEffortAbility

ImprovesSociety

Pro GoodActivities

Buy and UsePRODUCTS

Pro MoneyActivities

Non-ImpactRecreation

FinancialCapital

HumanCapital


NaturalCapital

Sun


FinancialCapital

HumanCapital


NaturalCapital

Sun

ImprovesWellness

ImprovesQoL

WASTELiquidGasesSolids

NaturalCapital

Depleted

MaybeimprovesFC in HC

FinancialCapital

HumanCapital


NaturalCapital

Sun

INPUTS ACTIVITIES BADImpact

State-EOPState-BOP

GOODImpact


Job-Money Work

Housing

Health

Time

Skills

Income

Recreation

Education

ProGood Work

Energy

PLUS opportunities

Improvessociety

Food

Clothes

ResourceDepletion

EnvironmentalDegradation

BOP EOPThe Individual


Sun

BOP

FinancialCapital

HumanCapital


NaturalCapital

Sun

PERSONALASSETS

Energy

Health

Enjoyment

Skills

Experience

Family

Shelter

Friends

Money

Stuff

QUALITYOF LIFE

Sun

FinancialCapital

HumanCapital


NaturalCapital

Sun

PERSONALASSETS

Energy

Health

Enjoyment

Skills

Experience

Family

Shelter

Friends

Money

Stuff

QUALITYOF LIFE

PRODUCTSuse MBSS

PRODUCTSImpact NC

PRODUCTSUse

MBSS

PRODUCTSimprove QOL


Sun

FOODActivities

IndividualQoL

IndividualQoL

Use of Pesticides

Use of Land

The IMPACT of FOOD

Use of Water

Use of Fertilizers

Air Pollution

Use of Growth Hormonesand Antibiotics

Use of Energy

Use of Equipment

Use of Labor Inputs

Money Price

Money Profit

Money Cost

True Value

Value Add

True Cost


Sun

BOP

FinancialCapital

HumanCapital


NaturalCapital

Sun SunSun

EOP

FinancialCapital

HumanCapital


NaturalCapital

Sun


Sun

LAND USE

Sustainable agricultureWater purification

About LAND USE

Wetlands

Intensive monoculture

Coastal mangrove

Urban infrastructure

Roads, Parking Lots

There is a limited amount of landThere are multiple possible uses

Money Profit

Land is a factorin improving

human capital, producing goods

and services, locating MBSS,and providingvery criticalecosystemservices

Suburban sprawl

Housing

Tropical forestHabitat

Industrial operations


Sun

BOP

FinancialCapital

HumanCapital


NaturalCapital

Sun SunSun

EOP

FinancialCapital

HumanCapital


NaturalCapital

Sun


Sun

WATER USE

Food productionuses water

Beverage productionuses water

About WATER USE

Water is essential to LIFENothing is more important

Household wateruse essential

Industrial processesuse water

Rainfall and freshwater are abundant

in some placesbut not everywhere

Household wastealso pollutes

Waste water pollutionfrom processesa critical issue

Important forall processes to

treat water beforedischarge

Water is abundant,but most has toomuch dissolved

salts to be potable


Sun

BOP

FinancialCapital

HumanCapital


NaturalCapital

Sun SunSun

EOP

FinancialCapital

HumanCapital


NaturalCapital

Sun


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 emissionshave a direct

impact on health

Nitrous oxides

Freon-ozone layerdamage

Some emissionsare greenhouse

gases that causeglobal warming

The atmosphere is not an infinite free

dump for undesirableand toxic emissions

All emissionshave a cost


Sun

BOP

FinancialCapital

HumanCapital


NaturalCapital

Sun SunSun

EOP

FinancialCapital

HumanCapital


NaturalCapital

Sun


MBSSMan-BuiltStructures& Systems

Sun

NaturalCapital

FINANCIAL ACCOUNTSHuman

Capital

MBSSMan-BuiltStructures& Systems

Sun

NaturalCapital

HumanCapital

Economic Activity … Process Accounts



BOP EOP


Employee Benefits

Employee Payroll

Other expenditures

Asset use costs

Depreciation

Financial expenses


Taxation

Profit



HUMAN CAPITAL ADD


employee?




and this process


Degradationof land



Impact on climate


Solid waste

Resourcedepletion



FOR

Negativeimpact



Sun

FINANCIAL ACCOUNTS

Economic Activity … Process Accounts



BOP EOP


Employee Benefits

Employee Payroll

Other expenditures

Asset use costs

Depreciation

Financial expenses


Taxation

Profit


Sun

FinancialCapital

HumanCapital


NaturalCapital

Sun SunSun

FinancialCapital

HumanCapital


NaturalCapital

Sun


MBSS

NaturalCapital

HumanCapital

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

ImpactStage 1

ImpactStage 1

ImpactStage 1

Cum Costs

Cum Profit

Price Stage 2

ImpactStage 2

ImpactStage 2

ImpactStage 2

Cum Impact

Cum Impact

Cum Impact

Cost = Price stage 2

Costs Stage 3

Profit Stage 3

Cum Costs

Cum Profit

Price Stage 3

ImpactStage 3

ImpactStage 3

ImpactStage 3

Cum Impact

Cum Impact

Cum Impact

FinancialDimension



MBSS

NaturalCapital

HumanCapital

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

ImpactStage 1

ImpactStage 1

ImpactStage 1

FinancialDimension


mdia p3-01-core-concepts-150420

Data & Analytics

good accounting system

cost value

standard value data

peter burgess c

value ignoreeverything

center data

buy price

flow state process