Concepts of Resource Consumption Accounting
RCA concepts that distinguish it from other management accounting approaches include the following:
- Germany’s GPK method of quantity-based operational modeling using fixed and proportional costs established at the resource level in a company (i.e., cost center/resource pools or value streams");
- Gordon Shillinglaw’s concept of attributable cost;
- Flexible use of activity-based drivers (only where needed) based on specific, and restrictive rules;
- Value chain integration of management accounting into operational systems;
- Use of fundamental operations transactions as the primary source for financial and quantitative data (rather than the general ledger);
- Replacing the principle of variability with the principle of responsiveness for operational modeling;
- Support for a multi-level, contribution margin-based profit & loss statement that supports managerial decision making without the cost distortions and complexity of inappropriate (not based on the principle of causality) allocations of cost.
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