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Open Risk
@openrisk@mastodon.social  ·  activity timestamp 4 days ago

There is a saying in French: "good accounts make good friends". Contemporary #accounting is very far from being good, ignoring vital aspects of life in favor of stylized monetary figures. Alternatives are a long but worthwhile road to travel.

In a new piece I explore why and how graphs can be used to express double-entry accounting in a natural way and how to extend also in the direction of consistent economic-network accounts (quadruple-entry).

#sustainablefinance

https://www.openriskmanagement.com/graphs_for_double_and_quadruple_entry_accounting/

Visual representation of quadruple-entry accounting (accounting that reconciles balances between entities) using a mathematical graph framework. The accounts of entities are nodes, their exchanges are edges. Transactions happen internally within the perimeter of entities or externally. The nature of directed graphs means that the double-entry balance requirements of standard accounting are satisfied naturally.
Visual representation of quadruple-entry accounting (accounting that reconciles balances between entities) using a mathematical graph framework. The accounts of entities are nodes, their exchanges are edges. Transactions happen internally within the perimeter of entities or externally. The nature of directed graphs means that the double-entry balance requirements of standard accounting are satisfied naturally.
Visual representation of quadruple-entry accounting (accounting that reconciles balances between entities) using a mathematical graph framework. The accounts of entities are nodes, their exchanges are edges. Transactions happen internally within the perimeter of entities or externally. The nature of directed graphs means that the double-entry balance requirements of standard accounting are satisfied naturally.
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