The Financial Accounting Model from a System Dynamics' Perspective

This paper explores the foundation of the financial accounting model. We examine the properties of the accounting equation as the principal algorithm for the design and the development of a System Dynamics model. Key to the perspective is the foundational requirement that resolves the temporal conflict that resides in a stock and flow model. Through formal analysis the accounting equation is redefined as a cybernetic model by expressing the temporal and dynamic properties of its terms. Articulated in that form the accounting equation is enabled to be defined as a dynamic stock and flow model expressing the two dimensions of the double-entry accounting system. With that formal foundation it is argued that the accounting model is capable to simulate financial dynamics as well as be integrated with models that express operational and world dynamics. Thus we prove that it is possible to design and build a dynamic business model that can meet requirements of management accounting (ex ante, before the fact) as well as financial accounting (ex post, after the fact). We conclude that the dynamic accounting model can be made relevant for strategic planning and control purposes and be integrated within a System Dynamics model designed for such purposes.dynamic accounting model, accounting simulation, System Dynamics

The Financial Accounting Model from a System Dynamics' Perspective

This paper explores the foundation of the financial accounting model. We examine the properties of the accounting equation as the principal algorithm for the design and the development of a System Dynamics model. Key to the perspective is the foundational requirement that resolves the temporal conflict that resides in a stock and flow model. Through formal analysis the accounting equation is redefined as a cybernetic model by expressing the temporal and dynamic properties of its terms. Articulated in that form the accounting equation is enabled to be defined as a dynamic stock and flow model expressing the two dimensions of the double-entry accounting system. With that formal foundation it is argued that the accounting model is capable to simulate financial dynamics as well as be integrated with models that express operational and world dynamics. Thus we prove that it is possible to design and build a dynamic business model that can meet requirements of management accounting (ex ante, before the fact) as well as financial accounting (ex post, after the fact). We conclude that the dynamic accounting model can be made relevant for strategic planning and control purposes and be integrated within a System Dynamics model designed for such purposes

NSO 2023, 2021, 2019, 2017, 2015, 2013 Nationaal Salaris Onderzoek - National Salary Survey - The Netherlands

Bi-annual survey of the Dutch labor market with particular focus on salary and demographic characteristics of employees. The study is a joint project of Intermediair and Nyenrode Business University. The authors are Prof. Dr J.J. (Jaap) van Muijen (Nyenrode) and Dr E. (Eric) Melse (Amsterdam University of Applied Sciences, AUAS). The reports are open access publications

Accounting in three dimensions: a case for momentum revisited

Purpose – This paper aims to extend an earlier analysis of the profitability of an individual firm operating in the professional services industry from the perspective of the triple-entry framework of the momentum accounting theory of Yuji Ijiri. Design/methodology/approach – The paper presents a “common-size-format” model of balance-sheet momentum, an approach typical of financial statements' mathematical analysis. Findings – Common-size-format momentum ratios offer an alternative measurement of (the change of) business performance. They model stabilizing phenomena that might develop very differently from ratios like return on total assets or return on equity and thus provide important informational signals to the analyst of financial statements. The common-size-format ratio of net wealth momentum herein discussed is proposed as a supplemental measurement for business performance analysis. Originality/value – The paper discusses a new method for performance measurement and risk analysis.Accounting, Accounting theory, Performance measures, Risk analysis