1. 1. MULTI DIMENSION IMPACT ACCOUNTING File: MDIA-p3-04-22-PHYSICAL-CAPITAL-150630.odp Peter Burgess (c) All rights reserved MDIA PHYSICAL CAPITAL PART OF MAN BUILT CAPITAL
2. 2. MULTI DIMENSION IMPACT ACCOUNTING WORK-IN-PROGRESS. SLIDESET STILL IN DEVELOPMENT. UPDATES WILL BE POSTED OVER THE NEXT SEVERAL WEEKS
3. 3. THE MDIA SLIDESET SERIES This slideset is part of a series being prepared to describe the concepts of TrueValueMetrics and being used to develop better metrics for the complex Socio-Enviro-Economic-System that now exists in the 21st century This link enables easy navigation to the other slidesets in the series: http://www.truevaluemetrics.org/DBadmin/DBtxt001.php?vv1=list0200-Burgess-p3-Slidesets MULTI DIMENSION IMPACT ACCOUNTING
4. 4. PHYSICAL CAPITAL is part of MAN BUILT CAPITAL (MBC) MULTI DIMENSION IMPACT ACCOUNTING
5. 5. Physical Capital comprises: Infrastructure; Factories; Production machinery and equipment; Transport vehicles (ships, aircraft, trucks, railcars, etc.); Houses and apartments; Offices, hotels and commercial buildings; Computers, communications equipment. MULTI DIMENSION IMPACT ACCOUNTING
6. 6. OWNERSHIP Physical capital that is owned by the private sector has a very different dynamic than physical capital that is not in private ownership ... MULTI DIMENSION IMPACT ACCOUNTING
7. 7. Private sector investment in physical capital is predicated on the earnings potential of the investment a search for profit and an aversion to risk. MULTI DIMENSION IMPACT ACCOUNTING
8. 8. In contrast, public sector investment in physical capital is driven by a broader view of the value of physical capital in advancing both economic and social goals. MULTI DIMENSION IMPACT ACCOUNTING
9. 9. Sadly, the system of metrics for policy and management used in almost all public sector organizations including governments is one that fails to differentiate adequately between expenditure on capital items and expenditure on current operations. This has many important repercussions ... MULTI DIMENSION IMPACT ACCOUNTING
10. 10. The purchase cost of a physical capital asset is a capital expenditure. In full accrual accounting this expenditure is 'capitalized' and written off over the lifetime of the asset. This is the periodic depreciation. The operational costs, repairs and maintenance are operational costs that are a charge for the period. MULTI DIMENSION IMPACT ACCOUNTING
11. 11. The way governments tend to work, a purchase of a physical capital asset is subject to significant analysis and then the capital asset is subsequently underfunded during its life so that there is inadequate maintenance and excessive deterioration. MULTI DIMENSION IMPACT ACCOUNTING
12. 12. INFRASTRUCTURE MULTI DIMENSION IMPACT ACCOUNTING
13. 13. MULTI DIMENSION IMPACT ACCOUNTING Sun BOP Sun Financial Capital Human Capital Man Built Capital Natural Capital Sun SunSun Financial Capital Human Capital Man Built Capital Natural Capital Sun EOPHIGHWAYS IN USA (SEATTLE)
14. 14. MULTI DIMENSION IMPACT ACCOUNTING Sun BOP Sun Financial Capital Human Capital Man Built Capital Natural Capital Sun SunSun Financial Capital Human Capital Man Built Capital Natural Capital Sun EOPHIGH SPEED RAIL TRACK (JAPAN)
15. 15. MULTI DIMENSION IMPACT ACCOUNTING Sun BOP Sun Financial Capital Human Capital Man Built Capital Natural Capital Sun SunSun Financial Capital Human Capital Man Built Capital Natural Capital Sun EOPCONTAINER PORT (New York / New Jersey )
16. 16. FACTORIES MULTI DIMENSION IMPACT ACCOUNTING
17. 17. MULTI DIMENSION IMPACT ACCOUNTING Sun BOP Sun Financial Capital Human Capital Man Built Capital Natural Capital Sun SunSun Financial Capital Human Capital Man Built Capital Natural Capital Sun EOPFORD FACTORY IN THE 1920s
18. 18. MULTI DIMENSION IMPACT ACCOUNTING Sun BOP Sun Financial Capital Human Capital Man Built Capital Natural Capital Sun SunSun Financial Capital Human Capital Man Built Capital Natural Capital Sun EOPFACTORY BUILDING IN CHICAGO
19. 19. INDUSTRIAL MACHINERY AND EQUIPMENT MULTI DIMENSION IMPACT ACCOUNTING
20. 20. MULTI DIMENSION IMPACT ACCOUNTING Sun BOP Sun Financial Capital Human Capital Man Built Capital Natural Capital Sun SunSun Financial Capital Human Capital Man Built Capital Natural Capital Sun EOPHOT STRIP ROLLING MILL
21. 21. MULTI DIMENSION IMPACT ACCOUNTING Sun BOP Sun Financial Capital Human Capital Man Built Capital Natural Capital Sun SunSun Financial Capital Human Capital Man Built Capital Natural Capital Sun EOPMINING EQUIPMENT
22. 22. TRANSPORT EQUIPMENT MULTI DIMENSION IMPACT ACCOUNTING
23. 23. MULTI DIMENSION IMPACT ACCOUNTING SunSun BOP Financial Capital Human Capital Man Built Capital Natural Capital Sun SunSun Financial Capital Human Capital Man Built Capital Natural Capital Sun Tractor Trailer Rig EOP
24. 24. MULTI DIMENSION IMPACT ACCOUNTING SunSun BOP Financial Capital Human Capital Man Built Capital Natural Capital Sun SunSun Financial Capital Human Capital Man Built Capital Natural Capital Sun Container Ship EOP
25. 25. HOUSING MULTI DIMENSION IMPACT ACCOUNTING
26. 26. MULTI DIMENSION IMPACT ACCOUNTING SunSun BOP Financial Capital Human Capital Man Built Capital Natural Capital Sun SunSun Financial Capital Human Capital Man Built Capital Natural Capital Sun URBAN HIGH RISE APARTMENTS EOP
27. 27. COMMERCIAL BUILDINGS MULTI DIMENSION IMPACT ACCOUNTING
28. 28. MULTI DIMENSION IMPACT ACCOUNTING Sun BOP Sun Financial Capital Human Capital Man Built Capital Natural Capital Sun SunSun Financial Capital Human Capital Man Built Capital Natural Capital Sun EOPCITY BUILDINGS
29. 29. COMPUTERS AND COMMUNICATIONS MULTI DIMENSION IMPACT ACCOUNTING
30. 30. MULTI DIMENSION IMPACT ACCOUNTING Sun BOP Sun Financial Capital Human Capital Man Built Capital Natural Capital Sun SunSun Financial Capital Human Capital Man Built Capital Natural Capital Sun EOPIBM 360 MAINFRAME COMPUTER
31. 31. MULTI DIMENSION IMPACT ACCOUNTING Sun BOP Sun Financial Capital Human Capital Man Built Capital Natural Capital Sun SunSun Financial Capital Human Capital Man Built Capital Natural Capital Sun EOPMOBILE WIRELESS TELEPHONY
32. 32. Follow up: Request for Feedback Getting these ideas fleshed out into a clear, simple but comprehensive structure is a big job and remains a work-in- progress. Many organizations are making progress with this, but there is no broad universal framework yet that will enable all the pieces to come together and work efficiently. I would like to get feedback from anyone and everyone to help move this initiative forward. While I have some clear concepts about much of this architecture, there are many details that I do not know enough about and need help. So, please feel free to contact me (peterbnyc@gmail.com). Please put something relevant and catchy in the subject line. MULTI DIMENSION IMPACT ACCOUNTING
33. 33. Some links and contact information: Peter Burgess peterbnyc@gmail.com Peter Burgess LinkedIn profile https://www.linkedin.com/in/peterburgess1 Link to TrueValueMetrics.org website http://www.truevaluemetrics.org/ Link to navigation for MDIA slidesets http://www.truevaluemetrics.org/DBadmin/DBtxt001.php?vv1=list0200-Burgess-p3-Slidesets MULTI DIMENSION IMPACT ACCOUNTING