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PACE Revenue Management IG

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I think it is interesting to look backward and see what has already said about this problem, which is at the heart of management.

In 1999 the International Federation of Accountants (IFAC) published a booklet prepared by the Financial and management Accounting Committee (FMAC) intitled “The role of management Accounting In creating Value”. Still available on

This booklet and the 10 papers it contents are around the relation between Value, Cost and Revenue. Surprisingly, the IMA publication “Revenue Management Fundamentals” ignore the concept of Value which is fundamental to interpret either the revenue or the cost of any offer to the environment.

Here is the abstract of the French paper

“During the last 15 years, there has been a tremendous interest in new costing techniques, especially in activity-based costing. But the efforts made to put the ABC/ABM approach into practice have not been supported by a corresponding effort in theory building. Most of the literature is dedicated to the computational side of the approach, and therefore we cannot see today any homogeneity in so called ABC costing.

The hypothesis presented in this paper is that the clue to the redesign of a costing system lies in their dual nature. Every cost system is a twofold system. On one side it describes resource consumption (using causality relations, traceability and responsibility); on the other side, through the product and services costing procedures it implicitly simulates the minimum value the firm is hoping to get from their customers.

To be profitable, a firm must have costs lower than the value perceived by customers. Thus, if management accountants want to contribute to efficient management of firms, they need to design costing system that are also consistent with the value chain of the firm. The only way to obtain such a result is to move along from activity to business-process based costing. This new vision allows the authors to suggest that the evolution of costing system design is driven by changes in value attributes and not by search for solving technical difficulties.

Simultaneously Managing Cost and Value: The challenge by Pierre Mevellec and Michel Lebas.



Welcome to the PACE Revenue Management Interest Group! This...
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