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The value-added statement: An appeal for standardisation

Author

Listed:
  • Arangies, G
  • Mlambo, Chipo
  • Hamman, W D
  • Steyn-Bruwer, B W

Abstract

Owing to the absence of accounting standards for the preparation of a value-added statement (VAS), a large variety of methods are used in financial statements. In this study the published value-added statements (PVAS) of companies listed on the JSE Securities Exchange during the period 1976-2005 have been standardised by the Graduate School of Business of the University of Stellenbosch (USB) in order to quantify the differences between the standardised VAS (SVAS) and the PVAS. These differences consist of the inclusion of items that do not belong in the VAS, items that are erroneously allocated among the distribution to stakeholders, and interpretation differences in whether a certain item forms part of the calculation of value added or the distribution thereof. The greatest difference quantified was the overstatement of the distribution to government that amounted to 54.4% of total differences. For users, including government, to properly calculate and compare the value added of different business entities, a standard for the preparation and presentation of VAS ought to be published. In the South African context the need of a precise measurement of each business entity's contribution to the growth of the national economy is relevant, and this need should also be addressed.

Suggested Citation

  • Arangies, G & Mlambo, Chipo & Hamman, W D & Steyn-Bruwer, B W, 2008. "The value-added statement: An appeal for standardisation," MPRA Paper 25970, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:25970
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    File URL: https://mpra.ub.uni-muenchen.de/25970/1/MPRA_paper_25970.pdf
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    References listed on IDEAS

    as
    1. Judith Christine Streak, 2004. "The gear legacy: did gear fail or move South Africa forward in development?," Development Southern Africa, Taylor & Francis Journals, vol. 21(2), pages 271-288.
    2. Chris Van staden, 2003. "The relevance of theories of political economy to the understanding of financial reporting in South Africa: the case of value added statements," Accounting Forum, Taylor & Francis Journals, vol. 27(2), pages 224-245, June.
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    Cited by:

    1. Vuyokazi Pikoko & Andrew Phiri, 2019. "Is There Hysteresis in South African Unemployment? Evidence from the Post-Recessionary Period," Acta Universitatis Danubius. OEconomica, Danubius University of Galati, issue 15(3), pages 365-387, JUNE.
    2. Miguel Ángel Martín Valmayor & Beatriz Duarte Monedero & Luis A. Gil-Alana, 2021. "The Social Balance Sheet as Part of the Annual Report in Financial Institutions. A Case Study: Banco Bilbao Vizcaya Argentaria (BBVA)," Sustainability, MDPI, vol. 13(6), pages 1-14, March.
    3. Axel Haller & Chris J. van Staden & Cristina Landis, 2018. "Value Added as part of Sustainability Reporting: Reporting on Distributional Fairness or Obfuscation?," Journal of Business Ethics, Springer, vol. 152(3), pages 763-781, October.
    4. José-Antonio Corral-Marfil & Núria Arimany-Serrat & Emma L. Hitchen & Carme Viladecans-Riera, 2021. "Recycling Technology Innovation as a Source of Competitive Advantage: The Sustainable and Circular Business Model of a Bicentennial Company," Sustainability, MDPI, vol. 13(14), pages 1-37, July.

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    More about this item

    Keywords

    Value added; Gross Domestic Product; South Africa; financial statements;
    All these keywords.

    JEL classification:

    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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