Editing Management accounting (section)

==Specific methodologies==

===Activity-based costing (ABC)===
[[Activity-based costing]] was first clearly defined in 1987 by [[Robert S. Kaplan]] and W. Bruns as a chapter in their book ''Accounting and Management: A Field Study Perspective''. They initially focused on the manufacturing industry, where increasing technology and productivity improvements have reduced the relative proportion of the direct costs of labor and materials, but have increased relative proportion of indirect costs. For example, increased automation has reduced labor, which is a direct cost, but has increased depreciation, which is an indirect cost.

===Grenzplankostenrechnung===
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{{main|Grenzplankostenrechnung}}
Grenzplankostenrechnung (GPK) is a German costing methodology, developed in the late 1940s and 1960s, designed to provide a consistent and accurate application of how managerial costs are calculated and assigned to a product or service. The term Grenzplankostenrechnung, often referred to as GPK, has best been translated as either ''marginal planned cost accounting''<ref>{{cite journal|last=Friedl|first=Gunther|author2=Hans-Ulrich Kupper |author3= Burkhard Pedell|title=Relevance Added: Combining ABC with German Cost Accounting|journal=Strategic Finance|issue=June|pages=56–61|year=2005}}</ref> or ''flexible analytic cost planning and accounting''.<ref>{{cite journal|last=Sharman|first=Paul A.|title=Bring On German Cost Accounting|journal=Strategic Finance|issue=December|pages=2–9|year=2003}}</ref>

The origins of GPK are credited to Hans Georg Plaut, an automotive engineer, and Wolfgang Kilger, an academic, working towards the mutual goal of identifying and delivering a sustained methodology designed to correct and enhance cost accounting information. GPK is published in cost accounting textbooks, notably ''Flexible Plankostenrechnung und Deckungsbeitragsrechnung''<ref>{{cite book|last=Kilger|first=Wolfgang|others=Updated by Kurt Vikas and Jochen Pampel|title=Flexible Plankostenrechnung and Deckungsbeitragsrechnung|edition=12th|publisher=Gabler GmbH|location=Wiesbaden, Germany|year=2002}}</ref> and taught at German-speaking universities.

===Lean accounting (accounting for lean enterprise)===
{{main|Lean accounting}}
In the mid- to late-1990s several books were written about accounting in the lean enterprise (companies implementing elements of the [[Toyota Production System]]). The term ''lean accounting'' was coined during that period. These books contest that traditional accounting methods are better suited for mass production and do not support or measure good business practices in just-in-time manufacturing and services. The movement reached a tipping point during the 2005 Lean Accounting Summit in [[Dearborn, Michigan]], United States. 320 individuals attended and discussed the advantages of a new approach to accounting in the lean enterprise. 520 individuals attended the 2nd annual conference in 2006 and it has varied between 250 and 600 attendees since that time.

===Resource consumption accounting (RCA)===
{{main|Resource Consumption Accounting}}
Resource consumption accounting (RCA) is formally defined as a dynamic, fully integrated, principle-based, and comprehensive management accounting approach that provides managers with decision support information for enterprise optimization. RCA emerged as a management accounting approach around 2000 and was subsequently developed at CAM-I,<ref>{{cite web|url=http://www.CAM-I.org|title=Consortium for Advanced Management International CAM-I|website=www.cam-i.org|access-date=2 May 2018|url-status=live|archive-url=https://web.archive.org/web/20171007163858/http://www.cam-i.org/|archive-date=7 October 2017}}</ref> the Consortium for Advanced Manufacturing–International, in a Cost Management Section ''RCA interest group''<ref>[http://www.cam-i.org/displaycommon.cfm?an=1&subarticlenbr=30 Cost Management Section ''RCA interest group''] {{webarchive|url=https://web.archive.org/web/20081207190442/http://www.cam-i.org/displaycommon.cfm?an=1&subarticlenbr=30 |date=2008-12-07 }}</ref> in December 2001.

===Throughput accounting===
{{main|Throughput accounting}}
The most significant recent direction in managerial accounting is throughput accounting; which recognizes the interdependencies of modern production processes. For any given product, customer or supplier, it is a tool to measure the contribution per unit of constrained resource.

===Transfer pricing===
{{main|Transfer pricing}}
Management accounting is an applied discipline used in various industries. The specific functions and principles followed can vary based on the industry. Management accounting principles in banking are specialized but do have some common fundamental concepts used whether the industry is manufacturing-based or service-oriented. For example, transfer pricing is a concept used in manufacturing but is also applied in banking. It is a fundamental principle used in assigning value and revenue attribution to the various business units. Essentially, transfer pricing in banking is the method of assigning the interest rate risk of the bank to the various funding sources and uses of the enterprise. Thus, the bank's corporate treasury department will assign funding charges to the business units for their use of the bank's resources when they make loans to clients. The treasury department will also assign funding credit to business units who bring in deposits (resources) to the bank. Although the [[funds transfer pricing]] process is primarily applicable to the loans and deposits of the various banking units, this proactive is applied to all assets and liabilities of the business segment. Once transfer pricing is applied and any other management accounting entries or adjustments are posted to the ledger (which are usually memo accounts and are not included in the legal entity results), the business units are able to produce segment financial results which are used by both internal and external users to evaluate performance.
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