Lean Accounting and GAAPLean Accounting and GAAP
The Purpose of Lean Accounting Statements is Different from GAAP
Lean Accounting statements are tailored to managing a lean value stream—for internal purposes
*
Lean Accounting Statements Depict Internally Generated Working Capital and/or Cash Flow from Value Stream Operations
Revenues are recorded when an item is shipped
Expenses are shown when the commitment to spend is incurred as when---
materials are received from a supplier
Labor is incurred
Depreciation is accrued
© BMA Inc. 2008. All rights reserved.
GAPP Statements Depict the Profit of the Company for the Period
Revenues are recorded generally when an item is shipped
Expenses are recorded to match the timing of the revenue recognition for items shipped
Costs of the items shipped—labor materials and other costs included in “overhead”
Costs of items produced but not shipped remain in inventory
*
Lean Accounting Statements Must be Adjusted to Conform to GAAP
The difference between Lean Accounting and GAAP statements lies in the change in inventory balances/items during the period
*