INTRODUCTION VALUE ADDED STATEMENT :

Financial reporting has traditionally been concerned with the income statement, balance sheet and cash flow statement. Over the years, there have been initiatives to expand the financial reporting package. One of these was that the Corporate Report of then Accounting Standard Steering Committee of Britain suggested the inclusion of a value added statement (VAS) in 1975

Value added can be defined as the value created by the activities of a firm and its employees, that is, sales less the cost of bought in goods and services. The value added statement (VAS) reports on the calculation of value added and its allocation among the stakeholders in the company.

The value added statement (VAS) is a voluntary disclosure and adds little information to that contained in the income statement. During the last two decades various theories have been used to explain voluntary and social disclosures. The fact that the VAS has attained such widespread publication despite being a relatively marginal disclosure, gives an early indication that the VAS is not a neutral corporate social disclosure but that it could be used to benefit those publishing it. VAS is used to alter perceptions about the company and in this way to manage stakeholder expectations.