In business, the concept of result is used to define the objective of economic activity carried out. But this goal can be very different depending on the prism that you look. Cooperatives there are two types of results,... [ view full abstract ]
In business, the concept of result is used to define the objective of economic activity carried out. But this goal can be very different depending on the prism that you look. Cooperatives there are two types of results, accounting profit, calculated by the difference between income and expenditure for the year, and the social result, as a measure and expression of achieving the social objectives set by the partners. These two results are not exclusive, they are complementary.
The social result is linked to corporate social responsibility, which is inherent to the nature of the cooperative. In these companies, the most appropriate instrument to reveal that social responsibility is the social balance, which, using socio-economic indicators should show the degree of compliance with the ICA cooperative principles, showing the cooperative difference.
However, the social balance, should also report on real economic efficiency obtained by the cooperative, once neutralized the effect of the transactions with partners. Usually the cooperative makes a covert distribution of the cooperative profit it generates, to the partner with whom he has performed activities. As a result, the analysis of the profit and loss account of the annual accounts, does not give a reliable measure of the efficiency or competitiveness of the company, and can make useful comparisons with other companies in the same sector with different legal form. Therefore, we believe that cooperatives should calculate the accounting profit obtained before transferring some of the profits to the partner. In this it would call accounting profit adjusted. This result should be displayed in a new accounting form, supplemental to the official, who would receive the name “adjusted profit and loss account", which have proposed a model.
We believe that the appropriate location of such "adjusted profit and loss account", would enter as a specific section within the social balance, as it should collect information on the economic and social management of the cooperative. Alternatively, assuming that the company was not obliged to compile the social balance, the adjusted profit and loss account should be included as mandatory information within the management report of the cooperative.
