The Value Added Statement: An Innovation For U.S. Companies

US company annual reports could benefit from the value-added statement (VAS), a European innovation that aims to show the wealth created and attributable to all stakeholders rather than just shareholders. Issues surrounding VAS include the concept of corporate social responsibility and the issue of whether managements of companies owe an obligation to more than shareholder-owners. Uses of VAS include: 1. measuring the wealth created by the company, 2. emphasizing stakeholder interdependence, 3. conditioning employee expectations regarding pay and prospects, and 4. forming the basis for productivity incentive schemes. There also are several conceptual issues that arise when preparing a VAS, such as treatment of depreciation and taxes and defining the members of the stakeholder group. The activities of a business affect more than the owners; thus, the VAS, as a supplemental disclosure, can redirect attention to certain wider implications of corporate activity.