Time and the Dimensions of the Economic Accounting System: A Mereological Exploration

Abstract

This paper explores the need, purpose and possible implementation of momentum accounting as part of the accounting framework. We believe that accounting has positive effects on the financial and economic aspects of corporate and social life. Nevertheless, it has become necessary to include financial and economic measurements into the accounting framework as to meet the growing demand for more for-ward-looking information for decision-making purposes as well as for auditing and corporate governance. Including a momentum dimension into the system of accounts transcends accounting from a description of the financial position of a business entity to a more complete economic expression of its trajectory in time. Momentum ac-counting expresses a Newtonian space-time reality of economic entities. This paper considers a geometric solution of the problem of how to define the foundation of the accounting system. A particular logic - mereology - is applied that describes the so-called 'parts-whole relation' that we see foundational to economic accounting. We demonstrate that the three accounting dimensions, as identified by Ijiri, all are a temporal expression of a closed system of accounts that follows from the generality assumption (Lim) and the duality assumption (Mattessich) that is foundational to the measurement system of economic accounting. We conclude by noting that momentum accounting is applicable to corporate governance, auditing, financial accounting, management control & accounting and, possibly, social accounting.

Keywords: economic accounting, momentum accounting, force accounting, accounting dimensions, accounting time, mereology

JEL Classification: M21, M40, M41