The Determination of Profit in Medieval Times

  • Alan Sangster
  • Mikhail KuterEmail author
  • Marina Gurskaya
  • Angelina Andreenkova
Conference paper
Part of the Advances in Intelligent Systems and Computing book series (AISC, volume 724)


This paper presents the results of research into the early practices adopted to identify financial performance. Focusing on the Pisan account books of Francesco Datini from 1383–1386, it reveals the special features of the calculation of profit or loss on each transaction. This, in its turn, is consolidated into the calculation of the overall profit or loss. This consolidation step was performed by transferring these profits and losses into a mercanzie account, literally, a merchandise account. All other income and expenditure that did not form part of a venture or a consignment was also transferred to this account. When balanced, it revealed the net profit for the period, just as today we find that in the statement of profit and loss, or income statement. The sophistication of the approach demonstrates the high level of the accounting culture in this medieval business, and suggests that this early precursor of the modern profit and loss account may have emerged earlier than the concept of a Trial Balance, rather than simultaneously as has previously been thought.


Financial performance Determination of profit “Profits and losses” account Trial Balance The Datini company 


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Copyright information

© Springer International Publishing AG 2018

Authors and Affiliations

  1. 1.University of SussexBrightonUK
  2. 2.Kuban State UniversityKrasnodarRussia

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