Accounting for Collaborative Supply Chain Relationships: Issues and Strategies

The purpose of this discussion paper is to explore the contemporary business modelthat has arisen with the advent of B2B e-commerce systems in order to better understand theimprovements needed in the financial reporting model. The contemporary business model hasrelegated the enterprise-centric view of corporate competition and the current financial reportingmodel to insignificance in many instances. Rather, today’s business environment is onedominated by competition between supply chains with an organization’s success ultimatelyhinging on the viability and success of its supply chain partners as much as, or more than,enterprise-centric policies and decisions. As a result, these highly integrative systems connectsupply chain partners in a manner that is more tightly coupled than most consolidated entities.Still, the current financial reporting model fails to even minimally capture the complexity of thisnew reality. This discussion paper provides the foundation for elaborating on a detaileddiscussion of how this business model could be more accurately captured through an enhancedbusiness reporting model.