Quote: The REA model gets rid of many accounting objects that are not necessary in the computer age. Most visible of these are debits and credits—double-entry bookkeeping disappears in an REA system. Many general ledger accounts also disappear, at least as persistent objects; e.g., accounts receivable or accounts payable. The computer can generate these accounts in real time using source document records. REA treats the accounting system as a virtual representation of the actual business. In other words, it creates computer objects that directly represent real-world-business objects. In computer science terms, REA is an ontology.
>At the heart of each REA model there is usually a pair of events, linked by an exchange relationship, typically referred to as the "duality" relation. One of these events usually represents a resource being given away or lost, while the other represents a resource being received or gained.
So, debit and credits.
The Wikipedia article does little to really explain how it works. How, for example, does a bank contemplating making a loan to the business evaluate its profitability and cash flow, or the liquidity of its assets? (After all, most bankruptcies are not because the business has negative net worth, but because it hasn't enough liquid assets to cover operational expenses).
Debits and credits can be seen as a type of resource flow in REA, but not all resource flows are debits and credits. A debit-credit architecture does not require linking resource flows with their duals, and those that do are likely a limited type of REA system. This loses important information.
Assessing value need not be any different in most cases. The point behind REA is not to change established methods of evaluating such questions for domain experts, but to show how traditional accounting abstractions are not core information abstractions and so shouldn't be modelled directly in computers, but should be derived views of a more general architecture.
https://en.wikipedia.org/wiki/Resources%2C_Events%2C_Agents
Quote: The REA model gets rid of many accounting objects that are not necessary in the computer age. Most visible of these are debits and credits—double-entry bookkeeping disappears in an REA system. Many general ledger accounts also disappear, at least as persistent objects; e.g., accounts receivable or accounts payable. The computer can generate these accounts in real time using source document records. REA treats the accounting system as a virtual representation of the actual business. In other words, it creates computer objects that directly represent real-world-business objects. In computer science terms, REA is an ontology.