Momentum accounting and triple-entry bookkeeping

"Triple-entry accounting" redirects here; not to be confused with Triple bottom line.

Momentum accounting and triple-entry bookkeeping is an alternative accounting framework proposed by Japanese academic Yuji Ijiri.^[1] It was designed to address perceived limitations in traditional double-entry bookkeeping. The system emphasizes the tracking of changes in account balances, particularly in revenue generation and cash flows. While double-entry records each transaction with two entries (typically a debit and a credit) on a specific date, momentum accounting recognizes changes in balances as key events. Momentum accounting introduces the concept of tracking the rate of change in financial variables over time, rather than static balances alone. Unlike double-entry bookkeeping, which captures transactions at a single point in time, momentum accounting emphasizes continuous financial flows and trends.Under this system, a consistent increase in revenue (e.g., from $10,000 to $11,000 monthly) is recorded through an additional entry representing the rate of change, distinguishing it from standard double-entry systems.

Although primarily a theoretical framework, momentum accounting has been discussed in academic circles as a possible enhancement for dynamic financial reporting. The model has been both praised for its conceptual innovation and critiqued for its complexity and lack of real-world adoption.