Build your accounting knowledge and culture by reading world history!
A bestseller in Japan with cumulative sales of 50,000 copies,
The world's easiest and most fun history of accounting

When we think of accounting, we usually think of complex numbers, calculations, and formulas.
Accounting, which may be unfamiliar to the general public who does not work in accounting, is actually one of the factors that has had a decisive influence on the course of history.
The origins of financial business, including accounting, began as early as medieval Europe, and individuals and nations that accumulated wealth through this began to systematize their commercial and financial systems for a prosperous future.


This book examines the history of financial business, which has enriched humanity at every moment of historical change from the 15th century to the present.
It provides an opportunity to read world history from a new perspective, such as the Banco of medieval Italy, which was created to protect merchants who had to trade by ship; the Dutch East India Company during the Renaissance, which created shareholders to build a large fleet and engage in trade; the law of depreciation, which was created to ensure the stable operation of railroad companies after the invention of the steam locomotive in the 19th century; and the secret stories of the birth of global wealthy people and companies such as Carnegie, Rockefeller, and Goldman Sachs in the 20th century.

From the time of his father, Giovanni, to the time of his son, Cosimo, the Medici family expanded into various businesses, including wool, trade, and banking, and developed into one of the most prominent families not only in Florence but also in Europe.
(Omitted) There were already several bancos in Florence, and the Medici family started the banco business a little later.
The Bardi and Peruzzi families, who had previously become prominent in Florence through successful business, made a fortune in wool textiles and trade, and then entered the banking business.
(Omitted) Banco of Florence was cautious when lending money to kings or nobles.
The Medici Bank must have been fully aware of the fact that 'the king or the nobles may betray you at any time.'
---From "Chapter 2: The Medici Family Creates a Financial Network"

The profits of the VOC (Dutch East India Company) gradually decreased over a long period of time because the prices of its main products, 'spices, tea, and sugar', fell.
For products with falling prices, the only way to compete is through quantity, and as transaction volume increases, transportation and storage costs increase.
However, a segment accounting structure that calculates profit and loss for each product has not yet emerged.
By clinging to the declining profit margins of spices, they missed the opportunity to switch to silk and cotton fabrics, which had begun to gain popularity in the late 17th century, and eventually lost this field to the British.
By these points, the Netherlands had already been 'defeated in commercial activities' by the British before the Anglo-French War.

---From "Chapter 3: The Birth of the World's First Joint Stock Company"

Railway companies have a large proportion of fixed assets and need to be managed for the long term.
Like the East India Company, the railway company also had a strong public interest, so the 'government's intention' was deeply involved.
In the case of the Liverpool-Manchester Railway, the government made various demands on the debt ratio and fare determination when raising funds. The steam locomotive was not only the emergence of a new 'autonomous transportation method', but also the world's first experiment in 'how a joint stock company with many fixed assets raises and operates funds'.
Even if the steam locomotive had been technically perfected, it would not have been able to spread throughout the world without an organization to support its 'procurement and operation'.

---From Chapter 4, “Steam Engines: Transforming British Industry”

As railways became widespread, telecommunications such as wired communication, wireless communication, and radar were developed in Britain, and as telecommunications technology advanced, the communications network expanded rapidly.
By the late 20th century, computers were connected through networks, and technologies were developed to transmit information in fine-grained packets and reconstruct it at its destination.
This Internet technology has enabled us to conduct email, search for information, and conduct financial transactions over the network.
Looking at it this way, we can see that the 'two trends' of industrialization and informatization emerged from the railroad.
One is the 'industrialization' of transportation, which expanded from steam locomotives to automobiles and airplanes.
Another is 'informatization', which started with wireless signals that communicated between stations and expanded to the Internet.
---From Chapter 6, Unifying the World's Accounting Standards

American manufacturing, which values ​​'scale' and aims for mass production while also trying to produce at low cost, often competes with 'single items'.
It goes without saying that single items can be produced in large quantities and at low cost.
The tradition of 'single-item competition' that continued with Carnegie's steel, Rockefeller's oil, and Candler's Coca-Cola reached its peak with the Model T Ford.
Signs of change are beginning to appear in the lineage of such 'single-item businesses'.
It all started with GE, which began manufacturing home appliances. Starting with incandescent light bulbs, GE gradually expanded its product lineup to include refrigerators, microwave ovens, washing machines, and vacuum cleaners.

---From Chapter 8, "Music and Accounting, Crossover"

Throughout history and the present, various types of investments have been made in commercial transactions.
In the Mediterranean trade of the Middle Ages, investments were made in spices, and in the factories that emerged after the Industrial Revolution, investments were made in buildings and machinery.
Even Michael Jackson surprised people by investing in copyright.
Investments made by a company are recorded as 'assets' on the balance sheet.
At the top of the balance sheet are 'current assets' that can be quickly converted to cash, and at the bottom are 'fixed assets' that take time to be converted to cash.
The question is, 'How do we value such assets?'
This 'asset valuation' is the most important issue in accounting and is also not an easy problem.

---From Chapter 9, “The Power of Numbers in Investing in Future Value”