Internal reconstruction is a method used in linguistics and corporate accounting. In linguistics, internal reconstruction is a method of reconstructing an earlier state in a languages history using only language-internal evidence of the language in question. The basic premise of internal reconstruction is that a meaning-bearing element that alternates between two or more similar forms in different environments was probably once a single form into which alternation has been introduced by the usual mechanisms of sound change and analogy. It is possible to apply internal reconstruction even to proto-languages reconstructed by the comparative method.
In corporate accounting, internal reconstruction refers to the internal re-organization of the financial structure of a company. It is also termed as re-structuring. The process of internal reconstruction is generally required when the company is incurring losses and its statement of account does not show any profit.
External reconstruction, on the other hand, is done to start the whole thing afresh. It is a type of corporate restructuring wherein the company arranges the organization by merging with another company or by selling its assets to another company.
In summary, internal reconstruction is a method used in linguistics to reconstruct an earlier state in a languages history using only language-internal evidence, while in corporate accounting, it refers to the internal re-organization of the financial structure of a company.
