Accounting and the German Culture

In: Business and Management

Submitted By amaktech
Words 2003
Pages 9

March 18, 2009


Grenzplankostenrechnung (GPK) is a German-based costing methodology that was developed in the late 1940's and 1950's. GPK is credited to an automotive engineer, Hans George Plaut, and an academic, Wolfgang Kilger. They worked together to identify and deliver a comprehensive methodology to give exact and improve cost accounting information. It is designed to provide a consistent and accurate application of managerial costs that are calculated and assigned to a product or service (Cooper and Kaplan, 1998). GPK has been the staple accounting method used in German-speaking countries for many years now. Is it actually better than the United States traditional accounting management style?
GPKs definition by United States standards is flexible margin costing system. Flexible margin costing, or GPK, is a cost accounting system used by many companies in German-speaking countries and is taught at German universities. It has proven it validity through its ability to give accurate, quick information about companies' financial position. GPK uses marginal costing instead of full costing. It helps to make short-term decision that lead to long-term plans for the organization. They form cost centers instead of activities and processes (Adkins, 2006).
Management accounting has long been more important to companies in German-speaking countries than to companies in the United States. Uniquely, this is probably linked to the fact that German speaking countries put the interests of creditors before shareholders. Financial accounting, which is used by most American companies, provides little guidance for management decision making. This is linked…...

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