ABSTRACT
This chapter examines measurement and financial reporting practices from the sixteenth century through to c.1800. It suggests that the accounting literature of the modern period focused principally on merchant accounting, Research into financial reporting practices, in contrast, has paid more attention to accounting within industrial concerns. The chapter also examines the evolution of the balance sheet and the profit and loss account as mechanisms for reporting the financial position and performance of business entities. It moves on from financial reporting procedures to consider measurement practices during the modern period. The chapter describes the procedures employed pre-1800 to measure profit and value assets. The assets include debtors, voyages, consignments, stock, shares in other companies, bills of exchange and fixed asset accounts. The chapter concludes with a proposed explanation for the primacy of historical cost, as the basis for measuring assets, both in the contemporary bookkeeping literature and in practice.
