UK Accounting Glossary
A Value Added Statement is a financial statement that depicts wealth created by an organisation and how that wealth is distributed among various stakeholders.
The value-added statement (also known as an added-value statement) is a financial statement showing how much wealth (the value-added) has been created by the collective effort of capital, employees, and others and how it has been allocated for within an accounting period.
Value added is normally calculated by deducting materials and external services from turnover.
The value added is then allocated to employees in the form of wages, to lenders and shareholders in the forms of dividends and interest, and to the Government in the form of taxes, with a proportion typically being retained within the company for reinvestment purposes.
This is a financial statement that shows how much value (wealth) has been created by an enterprise through the utilisation of its capacity, capital, manpower, and other resources, and how it is then allocated among different stakeholders (employees, lenders, shareholders, government, etc.) within an accounting period.
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This glossary post was last updated: 5th May 2019.