Value Added Reporting: Lessons for the United States

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A new form of accounting statement - the value added statement - is gaining popularity in the corporate annual reports of the largest companies in the UK. This statement can be viewed as a modified version of the income statement because, like the income statement, the value added statement reports the operating performance of a company at a given point in time, using both accrual and matching procedures. Unlike the income statements, however, it is interpreted not as a return to shareholders but as a return to the larger group of capital and labour providers. The author shows that the value added statement can be easily derived from the income statements and is therefore easily adaptable to the needs of US companies. To illustrate the usefulness of the value added statements, this book devotes the first chapter to a thorough discussion of its many benefits. The book then analyses the usefulness of the value added statement in understanding the characteristics of corporate takeovers in the US.

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A lengthy, well-written academic research work on the utility of a value added accounting statement. Riahi-Belkaoui proposes that value added reporting, popular with UK companies since the middle 1970s, should be adopted in the US to increase the social utility of accounting reporting. The book consists of four chapters covering the benefits of value added reporting; the usefulness of the concept in understanding corporate takeovers; the relationship of the value added concept to understanding systematic risk; and a lengthty case study on value added financial-statement analysis. An index, two articles reproduced from British periodicals, and three case exhibits constitute more than half the book. An excellent 32-page article using a historical-genealogical approach to value added theory is unfortunately very difficult to read due to a very small type font and poor print quality. The emphasis on stakeholders rather than stockholders is an emerging international and multinational trend explored with clarity in this book. This volume will be useful to graduate accounting and finance students for gaining an understanding of the development of accounting income measurement from cash to accrual back to cash, and now to a value added basis.-Choice
"A lengthy, well-written academic research work on the utility of a value added accounting statement. Riahi-Belkaoui proposes that value added reporting, popular with UK companies since the middle 1970s, should be adopted in the US to increase the social utility of accounting reporting. The book consists of four chapters covering the benefits of value added reporting; the usefulness of the concept in understanding corporate takeovers; the relationship of the value added concept to understanding systematic risk; and a lengthty case study on value added financial-statement analysis. An index, two articles reproduced from British periodicals, and three case exhibits constitute more than half the book. An excellent 32-page article using a historical-genealogical approach to value added theory is unfortunately very difficult to read due to a very small type font and poor print quality. The emphasis on stakeholders rather than stockholders is an emerging international and multinational trend explored with clarity in this book. This volume will be useful to graduate accounting and finance students for gaining an understanding of the development of accounting income measurement from cash to accrual back to cash, and now to a value added basis."-Choice

Author Bio

AHMED RIAHI-BELKAOUI is Professor of Accounting at the College of Business Administration, University of Illinois at Chicago, and Chairman of the Cultural Studies and Accounting Research Committee, American Accounting Association (Internal Accounting Section). He is also a member of the editorial board of several professional journals and is the author of sixteen previous Quorum books and co-author of two more.