value-added statement

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A financial statement showing how much wealth (value added) has been created by the collective effort of capital, employees, and others and how it has been allocated for an accounting period. Value added is normally calculated by deducting materials and bought-in services from turnover. The value added is then allocated to employees in the form of wages, to shareholders and lenders in the form of dividends and interest, and to the government in the form of taxes, with a proportion being retained in the company for reinvestment.

Subjects: Financial Institutions and Services — Accounting.

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