Implementing a Mutual Profit and Loss

Abstract

Chapter 14 records how Mars is seeking to implement a mutual profit and loss (P&L) statement in its management accounts. It is being used to align the management systems of Mars with its purpose and signal to the business that performance in terms of human, social, and natural capital is as important as financial performance. The mutual P&L reflects that the boundary of the firm should not be restricted to its legal and contractual rights and obligations but should also embrace the ecosystem that is relevant to the delivery of its purposes. It includes expenditures in the ecosystem as part of its activities and crucially recognizes these as investments not just current operating expenditures where they contribute to human, social, and natural capital as well as material and financial capitals. In line with traditional accounting methods, it values these investments at cost not at market values.