Alternative Views
Alternatives to traditional cost accounting have been proposed by various management theorists. These include:
- Throughput Accounting, under the Theory of Constraints, under which only direct materials costs are included in cost of goods sold and inventory.
- Lean accounting, in which most traditional costing methods are ignored in favor of measuring weekly "value streams".
- Resource consumption accounting, which discards most current accounting concepts in favor of proportional costing based on simulations.
None of these views conform to U.S. Generally Accepted Accounting Principles or International Accounting Standards, nor are any accepted for most income or other tax reporting purposes.
Read more about this topic: Cost Of Goods Sold
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