Preserving Accountability

Some of the revenues, costs, or capital charges on our reports do not have anything to do with what we manage. Managers should not be accountable for results they cannot manage, so those results should not be recorded on the financial statements of the business unit.

Example: 'Non-operating' land

Our textile company has land in Georgia (GA land) acquired by the owner's family and generating modest farm income.

We should remove the land assets and the income it generates from our income and net assets.