1494 - Commerce

Commerce

Genoese merchant Hieronomo de Santo Stephano visits Calicut on the Indian Coast and observes trade in ginger and pepper (see da Gama, 1498).

Summa de arithmetica, geometria, proportioni et proporitionalità by Franciscan monk Luca Pacioli, 49, at Venice is a seminal work showing how to use double-entry bookkeeping, which he did not invent but which will have huge economic consequences (see Cortugli, 1458). Every entry is recorded in two parts, debits and credits, with the debits in one part always equalling the credits in the other part. This creates a logical basis for portraying the financial picture of any enterprise, a common system of accounting whose standards theoretically make the balance sheet or income statement of any kind of business in any country understandable to anyone (although generally accepted accounting practices will vary from one country to another). The system is not totally inflexible, and an item on a balance sheet may not always be defined in the same way by every company, but double-entry bookkeeping provides a language by which people can communicate financially, and Pacioli's study of debits and credits represents the first comprehensive textbook on accounting.

Augsburg's Fugger family establishes its first public company, with a capital of 54,385 guilders (see 1469). Having taken charge of the family's Innsbruck agency 10 years ago, the tight-lipped Jakob Fugger II has long since taken command of the business. He has obtained a partnership interest for the family in Tyrolean silver mines and granted permanent loans to the archduke Sigismund and King Maximilian, who have secured their loans with deliveries of copper and silver (see 1495).