In 2012, I got a strange burr in my saddle from my Year 12 Accounting class.
Conventional Accounting produces Balance Sheets that have little relation to a company’s actual value because they don’t take into account the value of Goodwill (anticipated future earning capacity), Intellectual Property, and anything to do with Staff (skills, knowledge, sales relationships, etc.). Conventional monthly accounts and reporting practices take the attention of managers away from Staff, yet all hopes of future success reside in Staff. Since ‘What gets measured gets managed,’ the books make sure that investing in humans is left to chance.
I wondered whether a novel accounting practice could be integrated into accounting systems to remedy this. I explored how Staff could become an Asset requiring Maintenance and Investment in a way that was objective, such that people working independently could come up with the same accounting numbers.
This paper is the result.