Three Sided Accounting System

Accountancy

Double entry system of accounting and the financial statements generated from the books of account maintained on such system have inherent limitations. One of the important limitations of double entry system is the omission of non-financial transactions. In the present scenario there is a need to have a superior system of accounting which will consider not only such non-financial transactions but will also consider the other quantifiable data which will make these financial statements more meaningful. In this article, an effort has been made to discuss a potential new system of accounting, which can be called 3-dimensional system of accounting which will consider all three types of transactions namely; Category I - Transactions having only monetary effect; Category II - Transactions having monetary as well as quantity [3D] effect. The article also deals with a number of such areas where the presentation of financial statements will become more reliable and compliant with statutory requirements by applying the new method of accounting.

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