Wealth accounting is critical for measuring sustainability (Kevin J. Mumford, East Asia Forum)

Suppose you are an investor evaluating a company, but you only have its income statement. There you have revenue, expenses, profit and profit growth. If the company has experienced high profit growth then this may indicate future growth, and imply a sound investment. But if you can’t tell whether the company is simply selling off its assets, as shown on the balance sheet, then you will not have a good idea of the company’s potential for future growth. This same logic applies for measuring the wellbeing and development of nations and communities.

http://www.eastasiaforum.org/2016/02/16/wealth-accounting-is-critical-for-measuring-sustainability/