How did the successive stages of capitalism change the UK's accounting Essay

How did the successive stages of capitalism change the UK's accounting and financial reporting processes - Essay Example Thus, the feudal lord directly appropriated surplus labour (labour on the lord’s demesne, or commodities or cash in lieu thereof) from self-sufficient peasants, so that his ‘calculative mentality’ focused on maximising his ‘consumable surpluses. He had no concept of ‘capital as money or equivalent to be invested in production and recovered with a surplus’ (Bryer, 1999, P. 59). A ‘two-step transition from the feudal to the capitalist mode of production’ began with the emergence, in the sixteenth century, of ‘capitalistic’ or ‘semi-capitalist’ farmers, who employed ‘free’ wage workers in the capitalist manner, but still thought in terms of a consumable surplus in the feudal manner (Bryer, 1999, P. 68). Semi-capitalists also give the impression in international trade, one of the leading company among these was the East India Company. These traders were the first to consider the idea of a rate of r eturn. Bryer interpreted this terms as the ‘feudal rate of return’, and well-defined as ‘consumable surplus’ divided by total capital, which developed as the leading economic term after the bourgeois revolution of the mid-seventeenth century. Throughout the period of industrial capitalism, where return was generated mainly over the production of goods, the progressions of the industrial revolution lead to a large number of new openings, that needed slight fixed capital. Later, there was a complete shift to finance capitalism, which demended more capital, and emphasis had been given to the profit generation, through the the purchase and sale of financial instruments of numerous forms, and from the growing needs of the public services. (Hawke, et al., 1981, P. 678). Edwards dates the transition to finance capitalism as 1830, the year in which the Liverpool and Manchester Railway opened for business, and argues that the most recent ‘leap forward’ in financial accounting, the change in emphasis from record keeping to financial reporting, began to take place in the second half of the nineteenth century, ‘in response to the growth of the modern business enterprise and the separation of ownership from management’ (Edwards, 1989, P 13). The substantial capital expenditures and scattered fund raising of finance capitalism in sequence raised up a number of accounting distresses, which is still prominent today, relating to the need to differentiate between capital and revenue expenditure, calculation of periodic profit, and the valuation of fixed assets. The railways, as the leading industry of the mid and late-nineteenth century economy, have generally been rendered a dominant place in the growth of financial reporting, but the canal industry has been almost unnoticed, in spite of its similar standing to the English economy and its substantial impact on the industrial revolution. This is further unanticipated move, sin ce it can be claimed that the canals, using surpluses from the use of capital in agriculture and trade and employment of capital provided by the industrialists and other investors, represent the real starts of finance capita