Claims Debt and Equity in REA with FIBO Extensions (short paper)

This paper presents an ontological analysis of the concepts proposed for extensions to the REA ontology to accommodate or define Debt and Equity. Earlier work aimed to use the REA concept of ‘Claim’ to provide the language in which to create a symmetrical treatment for Debt and Equity, however no such symmetry was apparent. The exploration given here uses the Design Science Research (DSR) methodology to take a step back and consider the range of possible concepts to which the word ‘claim’ may be mapped, comparing these to the canonical REA concept for Claim. We analyzed three such concepts, rejected one, found another to be coextensive to Debt and were left with a third, useful concept that does not precisely map to REA Claim. We established that the concepts needed for Debt and for Equity can be defined using existing REA concepts, by abstracting Commitment to a broader usage in agreements generally. Finally, we identify work that remains to be done to unify the models developed in this exploration, with canonical REA concepts.