International Business and Nonbusiness Accounting

INB421 International Business and Nonbusiness Accounting

Spring 2019

Autumn 2019
  • Topics


    All types of organizations around the world prepare accounting reports at least annually (financial accounting). Therefore, accounting is an international phenomenon that should be studied by applying an international perspective. Furthermore, the two basic objectives for preparing accounting reports are to report information useful for accountability and decision-making purposes. However, since different types of organizations, like business and nonbusiness organizations (including governmental organizations), acquire revenues for financing their expenditures in different ways, they have traditionally prepared their accounts in different ways: Whereas business organizations prepare accounts reporting the profit effects of their revenues and expenditures, governmental and other  nonbusiness organizations (often referred to as nonprofit organizations (NPOs)) have prepared accounting reports that report the money effects of their revenues and expenditures. In recent years, however, we can observe that governmental and nonbusiness accounting (in the form of money accounts) are increasingly being influenced by business accounting (in the form of profit accounts).


    This course will present and compare business and governmental/nonbusiness accounting, aiming at increasing the understanding of different accounting models that are used in the business and governmental/nonbusiness sectors. Such an understanding is important, since the accounting reports prepared by different types of organizations are to be used for accountability and decision-making purposes.


    The course consists of five main parts:


    Part I: Introduction

    Part I will give a general introduction to financial accounting, with a special focus on presenting a clear accounting terminology. In particular, it will be highlighted and explained that revenues (defined as claim on cash to be received) and expenditures (defined as claim on cash to be paid) are the main accounting concepts, since expenditures are to be financed by revenues. Moreover, the revenues and expenditures could be accrued to the accounting period in question by use of different accrual principles, something which wil be explained in the course. By so doing, this part of the course will establish a basic accounting platform for subsequent parts, where the accrual principles used within different accounting models, as they are applied in the business and governmental/nonprofit sectors, will be in focus.


    Part II: Commercial (business) accounting

    Part II will focus on accounts prepared by business enterprises that are involved in commercial activities with profit objectives; this accounting model could thus be referred to as business accounting, or more informatively, commercial accounting. In particular, it will explain why business accounting today focuses on reporting the profit effects of revenues and expenditures by use of the ´accrual principle", and thus will be a good supplement to other financial accounting courses that depart from accounting regulations (accounting acts and international financial reporting standards (IFRS)) that are based on using this particular version of the accrual principle. Furthermore, this part will also give a good platform for understanding governmental and nonbusiness accounting and thus will be used as a part of the framework in subsequent parts.


    Part III: Fund accounting

    Fund accounting (with a money focus) was developed within Anglo-Saxon countries for use by business enterprises as an alternative to using commercial accounting (with a profit focus). However, fund accounting did not attract any interest in the business sector, but was further developed for use by governmental and nonbusiness organizations within Anglo-Saxon countries.


    In Part III, fund accounting will be explained and compared with commercial accounting. In this way, the understanding of governmental and nonbusiness accounting within Anglo-Saxon countries will increase; furthermore, the basic understanding of commercial accounting will also increase when it is compared with another accounting model, like fund accounting.


    Part IV: Cameral accounting

    Cameral accounting is an accounting model developed within the German-speaking continental European countries for use by governmental organizations. The reason for this development was the fact that commercial accounting with its profit focus (cp. Part II) did not report the money information required by governmental organizations (or more precisely, governmental administrations). Although the main version of cameral accounting (administrative cameralistics) basically has similar money objectives as fund accounting (cp. Part III), there are important differences between cameral and fund accounting that will be explained. Through such a comparison, the understanding of governmental and nonbusiness accounting (in the form of cameral and fund accounting) internationally will increase further.


    Furthermore, there is also a second variant of cameral accounting, developed for use by governmental enterprises (like governmental business and electricity companies), which are more similar to business enterprises than to the governmental administration. This version of cameral accounting is referred to as enterprise cameralistics, and it will be explained and compared with commercial accounting. By so doing, not only the basic understanding of cameral accounting will increase, but also the basic understanding of the accounting model that today is used by business enterprises (referred to as ´commercial accounting´ in this course, but often imprecisely referred to as ´financial accenting´ or ´accrual accounting´) will increase further.


    Par V: Governmental and nonbusiness accounting

    As opposed to the situation in the business sector, where business enterprises prepare their accounts in accordance with national or international accounting standards (like IFRS), which are based on use of the commercial accounting model with a profit focus (cp. Part II), the situation in the governmental and nonbusiness sectors is more diverse internationally. In particular, within the Anglo-Saxon countries there has been a discussion whether to use fund accounting (cp. Part III) or commercial accounting (cp. Part II) when preparing the accounts of governmental and nonbusiness organizations. In Part V, this debate will be presented and broadened by also incorporating cameral accounting (cp. Part IV). Furthermore, it will be illustrated how the accounts of nonbusiness organizations could become more informative and more relevant for accountability and decision-making purposes, when using fund accounting or cameral accounting as accounting frameworks, as opposed to using commercial accounting as this framework, such as the situation internationally is today.

  • Learning outcome


    Upon completion of the course the candidate

    • has acquired a precise accounting terminology
    • understands why all types of organizations prepare accounting reports
    • understands important similarities and differences between business and nonbusiness (including governmental) accounting



    Upon completion of the course the candidate

    • can explain similarities and differences between different types of accrual principles
    • can explain why business enterprises apply an accrual principle with a profit focus, whereas governmental and nonbusiness organizations historically have applied accrual principles with a money focus
    • can prepare informative accounting reports (primarily with a money focus) for governmental and nonbusiness organizations


    General competence

    • can communicate with persons both in the business and governmental (nonbusiness) organizations about financial accounting issues

  • Teaching

    Lectures supplemented with classroom and hand-in-problems

  • Requirements for course approval

    There are three hand-in problems, of which one needs to be handed in individually for course approval.

  • Assessment

    4 hours written school exam

  • Grading Scale


  • Literature

    The literature will be available on Canvas and consists of:


    Anthony, R.N, Should business and nonbusiness accounting be different (Boston, Massachusetts: Harvard Business School Press, 1989).

    Monsen, N., Commercial accounting, fund accounting and cameral accounting: Introduction and comparison with a view to us in the governmental sector (NHH Norwegian School of Economics, 6th edition, 2017).

    Selected articles.

    Monsen, N., INB 421: International Business and Nonbusiness Accounting:

                                          Lecture notes.

    Monsen, N., INB 421: International Business and Nonbusiness Accounting:



ECTS Credits
Teaching language

Autumn. Offered Autumn 2018

Course responsible

 Professor Norvald Monsen, Department of Accounting, Auditing and Law, NHH.