I’m curious about a usecase. Say I am making a loaf of bread, and it takes 10 steps (events), after which it becomes a ‘coherent product’ or a unit of account. How do you handle this? Or how does REA accounting include the ‘product’, or in other words how does this look in the system, this outcome(?) of a REA accounting chain?
If I’m understanding you correctly then probably it just gets modeled as an output resource on the last process in that set of steps.
REA has evolved over the years to include ‘product’ as part of the core grammar. The model is really two things- an exchange model (from accounting), and an input-process-output model (from production / chemistry / lots of other disciplines).
In the case of events which transform one type of resource into another, we model that as I-P-O. It ends up looking kinda like this:
In terms of the model, in your example case the last step (call it “bake loaf”?) is a process which consumes the dough (as well as consuming electricity, using the oven etc), and produces the bread loaf.
Flow traversal algorithms can then then follow through the events, resources and processes in order to discover the full provenance chain of the bread.
Beautiful, thanks! I love the diagram
Nice explanation, @pospi !
Small clarification: I think this means not that the term ‘product’ is part of the vocabulary, but that it is an ‘economic resource’, the same as the flour, yeast, etc. One agent’s output can be another agent’s input kind of thing, it’s resources all the way down.