Game changer in accounting



Dr. Ijiri invented a system of what he called “triple-entry accounting,” which would supply information not just about income produced in a given period but the rate at which income was earned and how that rate was changing, among other things. That system didn’t catch on with companies and isn’t related to a more recent concept of triple-entry accounting using shared online ledgers.

Dr. Ijiri insisted that historic costs were more reliable and useful in accounting than estimates of current values. Historic costs, based on real transactions rather than hypothetical ones, left less room for manipulation and created a record that held managers accountable, he argued.

Despite his arguments, accounting standard setters increasingly have called for incorporating estimated current values. Dr. Ijiri said accountants tend to cling to their valuation preferences like a religion. But the pendulum could swing back, Dr. Ijiri’s fans say. “These battles are not won or lost in a lifetime,” said Prof. Sunder of Yale.