Stewardship: the core of cooperative accounting

Abstract

Stewardship is a core feature of accounting for cooperatives in contrast to investment oriented accounting for capitalist companies. The right to redemption of capital in cooperatives had no parallel in investor-owned companies and is central to understanding cooperative accounting. Generally accepted accounting principles for business enterprises in the twentieth century were influenced by distortionary concepts such as the pre-eminence of income measurement and the matching concept. The development of formalized accounting standards based on the needs of investor-owned businesses has been at the expense of stewardship function. Cooperatives and other mutuals are right to resist the pressure to conform to such standards and should report in ways that recognize the importance of stewardship in the twenty-first century.