 Momentum Accounting and Managerial Goals on ImpulsesYuji Ijiri
Management Science, 1988, vol. 34, issue 2, 160-166 Abstract: Conventional accounting measures wealth W (assets and liabilities) and accounts for its net change, W(t + 1) - W(t), by means of income \Delta W(t), classified into various revenue and expense items. Proposed "momentum accounting" measures income momentum W\dot = dW/dt (time rate at which income is being earned at a given point in time) and accounts for its net change, W\dot(t + 1) - W\dot(t), by means of impulses \Delta W\dot(t). Here the impulses, a term borrowed from the momentum-impulse principle in mechanics, are classified into various factors, internal or external to the enterprise, that contributed to the momentum change. If conventional accounting is viewed as focusing on an odometer of a car, momentum accounting is analogous to focusing on its speedometer and attributing the change in its reading to impulses that are judged to be responsible for the change. This paper proposes impulse-based managerial goals as a substitute for currently popular income-based managerial goals, discussing problems associated with the latter that highlights short-term income achievements and that tends to reward management for the momentum created by their predecessors as it is realized as income by the mere passage of time. Keywords: momentum accounting; triple-entry bookkeeping; performance measurement based on impulses (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:inm:ormnsc:v:34:y:1988:i:2:p:160-166 Access Statistics for this article More articles in Management Science from INFORMS Contact information at EDIRC. |
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