EAPP Magazine

ACCOUNTING TIMELINE:
INTAN, AG SUBLI TAYU!
4000 B.C.

 The income of temples was recorded in lower Mesopotamia.

2500 B.C.

 Historical accounting records had been found in ancient civilizations like Egypt and China.
During that time, accounting records were kept by rulers for taxing and spending on
public works.
1000 B.C.

 The Phoenicians created alphabet with accounting so that they were not cheated
through trades with ancient Egyptians.
500 B.C.

 Egyptians carries on with accounting records and even invented the first bead and wire
abacus.
423 B.C.

 The auditing profession was born to double check storehouses as to what came in and
out the door. The reports that were taken by these accountants were given orally hence
the name “auditor.”
10

 Emperor Wang Mang (45 B.C. to 23 of Xin Dynasty) of China instituted the first known
income tax at a flat rate of 10% of profits.
1200 to 1493

 The first requirement for businesses to keep accounting records spread across many of
the Italian Republics in the 13th century. These records were mainly taken to keep track
of the day to day transactions and credit accounts with other businesses.
 In 1327, early books from the commune of Genoa displayed an early form of
bookkeeping. The oldest double – entry books entitled “Massari (Treasury Officials)
Ledgers of Commune of Genoa” were written in 1340. In today’s accounting system, this
is simplified into the T – account and expanded into the Ledger.
 In Florence, writing debits over credits accounted for its double -entry recording
  In 1400, the Italian trading period saw sophisticated accounting systems developed
within banking houses. Double Entry bookkeeping was discovered.
 During this period, there were two prevailing approaches to reporting. These were the
Florentine approach (journal entries) which was introduced by Amatino Manucci and the
Venetian approach (ledger postings) which was introduced by Andrea Bargarigo.
1494

 Luca Pacioli, the father of modern accounting, wrote his famous paper “Summa de
Arithmetica, Geometria, Proportioni at Proportionalita”. He revealed that several
merchants kept books of debits which meant “he owes” as well as credits which meant
“he trusts.” With this early double entry accounting system merchants were able to
maintain records so that they could improve the efficiency of their businesses. With these
records came the primitive income and balance sheet statements.
1500 to 1700

 As the time progressed, large and small innovations were added to the double entry
records. For example, the East India Company developed invested capital and dividend
distribution during the 17th century. This also created the need for a change in financial
accounting and managerial accounting.
 The first for presentation to gain investors and the next was used so that the business
could be run as efficiently as possible.
1700 to 1900

 During the Industrial Revolution, accounting really took off as industrial companies
sought out to gain financing and maintain efficiency through operations.
 Several of the double entry accounting methods was truly developed in this area as there
was a focus on business as never before.
 Eugen Schmalenbach utilized price level accounting as the basis of valuation.
1913

 The first income tax law in the Philippines was enacted

1920 to 1940

 Accounting in the 1920s became important to reduce the amount of fraud and scandals
that were performed in businesses, particularly in the United States of America (USA).
 In 1923, the first Accountancy Law (Republic Act No. 3105) in the Philippines was passed.
This law created the Board of Accountancy (BOA).
1940 to 1970

 Globalization of business resulted in diverse accounting practice around the world. Thus,
the need for harmonization.
 In 1967, the Accountancy Law in the Philippines was revised and passed under Republic
Act No. 5166. This law standardized the accounting education and regulated the practice
of accountancy. This law also spelled out the examination process of CPA registration.
1973

 The International Accounting Standard Committee (IASC) was created through and
agreement made by professional accountancy bodies from Australia, Canada, France,
Germany, Japan, Mexico, the Netherlands, the United Kingdom and Ireland, and the USA.
The committee is an independent private sector body, eith the objective of achieving
uniformity in the accounting principles which are used by business and other
organizations for financial reporting around the world.
1975

 In the Philippines, the Accountancy Law was revised and passed under Presidential
Decree No. 692
1981 to 1996

 In 1981, the Philippine Institute of Certified Public Accountants (PICPA) created the
Accounting Standards Council (ASC) to establish and improve accounting standards
generally accepted in the Philippines.
 Until 1996, most if not all, of Philippine accounting standards, called Statement of
Financial Accounting Standards (SFAS), were based on accounting standards in the USA.
1997

 The Philippines started transitioning from applying American accounting standards to

applying IAS.
2001

 The International Accounting Standards Board (IASB) succeeded the IASC. It has still
adopted the body of standards issued by the IASC but moving forward, all standards were
designated as International Financial Reporting Standards (IFRS)
2002

 The European Union (EU) required all EU listed companies to adopt IFRS starting 2005.
2004

 In the Philippines, the Professional Regulation Commission (PRC) created the Financial
Reporting Standard Council (FRSC). This replaced the ASC and was created to assist the
Board of Accountancy (BOA) to carry out its powers and functions provided under
Republic Act No. 9298, the Philippine Accountancy Act of 2004. Complementing IAS and
IFRS were the Philippine Accounting Standards (PAS) and the Philippine Financial
Reporting Standards (PFRS).
2005

 The Philippines became fully compliant with IFRS.

JARGON:
PAREDOWN - The firing of employees and/ or the use of less plant and equipment (source:
www.dictionaryofmanagmentjargon.yolosite.com)
Testimonial about accounting:
NARIGAT MET GAYAM NGEM NALAKA MET NU NAAWATAM!
“Narigat met gayam” an Ilocano term for the expression ‘it is hard’, this is the expression
I would often say when our teacher is giving us problems for us to answer and whenever I hear
the word accounting. I could definitely say that this expression would best describe my
experience when I was learning accounting and still now I am. As I begin to learn accounting in
the past year, I came to realize that it is hard and needs to apply analyzing to really understand
the subject. I came to realize that my grade is beginning to fail, so I came up of strategies to save
my failing grade and turn it into aiming the highest possible grade it could get. Grades are
numbers but they are so important. When I was in Grade 11, everyone was talking about the idea
that accounting was hard, and so I agreed, but as time passed by, accounting was just as easy as
one, two, three. With the help of our teachers reminding us always to learn the basic rules in
accounting and of course to also learn the GAAP (Generally Accepted Accounting Principles)
which will guide us when solving problems and especially when we are already in the field of
business in the near future. Now that I am in Grade 12, my expression when hearing or when
solving a problem in accounting would be “Nalaka met” an Ilocano term for the expression ‘Ang
dali naman’. It always takes a little time for us to really understand a subject, we just need to
focus and to love what we do and for what we are good at. We just have to believe in ourselves
no matter how hard it is, and so we’ll say “Narigat met ti accounting ngem nalaka met nu
naawatam” which means, accounting is hard but it is also easy if you understand.