MULTI VALUES MANAGEMENT & REPORTING SYSTEM
In today Economy we manage Financials Value most of the time, or we try to convert others values in financials ones but the fair value must be considered validated on an Active Market, that means the Market that use to trade the same assets like ours.
We have references (assets catalog with similar prices) on the assets market, and same market structure like: administration, market board, rules, authorized humans validating the transaction content, journal of transactions...
The Intangible Assets Market is acting like others markets: financials, raw materials, cows, cereals, diamonds, many different Tangible Values Markets.
Intangible values Market exists already, the Companies shares, in stock - exchange is Intangible Value integrated with Tangible Financial Assets.
Enterprise Value, mostly Intangible Value are traded like: Crypto, derivative value, index-based value...
We have the use of the Intangible Assets Markets, but just not the mental to trade the Intangible Company Assets on a Market like these others, but this is the condition to measure and count the value contributions with direct impact on the Company Value.
We avoid to count others values behind monetary, our understanding of Accounting is limited on the financial rules of the organizational system called Accounting, based on the 16th century basic rules.
We must liberate our cognitive and extend the Accounting to many others Values linked to the Human activity like Business Resilience, Social & Societal, Human rights & Governance, and others Business models, Circular Economy, Functionality Economy, Knowledge & Competency Economy.
For each type of Value, we use a measurement unit specific to that Value so we can compare, our management from one day to next day but also to similar Business.
The Reporting for our stake holders regarding the different Values, financials or not, must be based on measurement units, and counting these units is the management essential duty.
Is not sufficient to create the Value report-heading and set an appreciation on it, is important to measure the result of the management decisions, and appreciate the differences between the planned asset, the decisions, to obtain the planned goal inside a Corporate Value creation strategy, this is management.
Investor, stakeholder, government, rating institutions, need materiality of the value transactions and group them in “account”, so the reporting is based on readable, auditable, measurable, value contributions.
The specific Value Manager needs the Reporting of the specific Value to be Integrated with the others Values and Financial ones in a usual framework like GAAP, IAS, FASB.
The conversion rate from one measurement unit to another is decided by the Company board and depends on the Company essential business objective, if is financial profit or Resilience one, or Knowledge and Innovation capacity, or creating & maintaining jobs for long period.
Of course, we have multiple objectives, with different currencies, and exchange rates so we can in the Reporting, consolidate all created Values in the one that is analyzed.
The Stake holders can appreciate the augmented Values Balance and Score-board with integrated Intangible and Tangible Assets and Values flows
Politics is driven by Humans dreams, vision, behavior, sentiments, intuitions, creative power, and Economy is driven by Politics, the important Values are recognized by the Human and drive’s the Market.
The Companies setting priority on the same Values like most of the Humans, will be the best-invest corporate and be “payed” for his Values-respect
Humans are asking Multi Values, to be the Companies objectives, Financials and Not- Financials, to be able to Manage them Integrated with different Business objectives, transparent for the Stake holders but specially for stock holders, they can invest more than money, probably hopes, dreams, sentiments, intuition, planet responsibility, this is together with the stock price when they invest.
So, Companies must be transparent with the Values created through their activities, and manage & report them all, to achieve this they need at least a Manager for each of the Managed Value.
The Intangible Asset Manager in order to manage needs an Accounting framework and accounting rules to be able to measure and count the value contributions of the Intangible Values. To be able to register the “value transactions” correlated to the managed value and audit them.
We need to preserve the today accounting system which is able to extend in the existent new rules, and manage more Values, like Intangible Values, convert them and integrate them in a ONE Accounting Report system familiar to us.
The practices of the Multi Values Accounting will naturally create more capillarity in the asset’s account organization chart, with many new “value centers” for the Intangible Value Assets, and the “values transaction map” will explicit the flow of the non-financial values.
Using one Accounting system will assure a coherent multi -views of the Company Value creation processes.
Today the Economy is much more complex than just one financial value, Environment, Social, Care -about-next-to-me, are values that long time, we weren’t ready to care about, now we must care, so we must manage.
Manage means organizing the respective value flow consisting in value transactions, and separate them in smaller groups type of transactions needed to understand the value creation process in order to manage it.
Accounting is the system that organize the value flows just financials at the beginning, products and services just after, but now will be augmented with “new accounts” playing roles in the different others values regrouping organization .
The accounts are separate cases for different types of values transactions, financials and products or services. The value transactions are measured in many different units, depending on country, or type of value, that doesn’t affect the Accounting system to help Human understand the content of the value that is managed and how improve this value creation process.
What is the today Account meaning?
Account refers to assets, liabilities, income, expenses, land, equity... all these are assets and values flows, to which changes in value are chronologically recorded with debit and credit entries. The entries, referred to as postings, can be value creation or lost value.
The Account is a “Value Center” in which we record “ value contribution “ like the “value transaction” posted in the Account, the entry of the value is debit because the goal is to use this “value-in” to generate more value, so when we distribute the created “value-out” of the Value Center it will be on the credit
The Intangible-value that we distribute is non-inventory, so no- limited, and neither price-limit, for each transaction validated by the “buyer” VC (value Center) we post on credit, is a created-value.
The Intangible Value Accounts has no-equal rule between debit and credit because the value generated by the Account in Intangible accounting in not dependent of the value-consummated in the respective account .
A chart of accounts provides a listing of all financial accounts used by: particular business, organization, or government agency.
The Value Centers will be along the Business Processes figuring the Intangible value creation centers of the Company.
The system of verifying, and reporting the Tangible & Intangible values and Assets is the Extensive Accounting, general rules are stable, exception on the input-output equality.
The control of the transactions in Intangible value is the “receiver” of the “value transaction”. The validation of the “value transaction” and the “Fair Value”, will be achieved by both parties in an “Active Value Market” trading Intangible Assets, just normal business practices for long time.
The today accountants, experts, auditors, institutions, will just “augment” their practice.
Exercise the Multi Values Accounting and Management, with the different measurement units and KPI’s will open a new era in the Business management, because Business is more than financial profit just now already.
Look to the hundreds of Companies with financial all times looses and their stock-market value, the Intangible Value conversion is on-the-way!