Development of managerial accounting in Germany: A historical analysis

              The Accounting Historians Journal Vol. 17, No. 2 December 1990
A. G. Coenenberg UNIVERSITY OF AUGSBURG and
H. M.
W.
Schoenfeld UNIVERSITY OF ILLINOIS
THE DEVELOPMENT OF MANAGERIAL ACCOUNTING IN GERMANY: A HISTORICAL ANALYSIS
Abstract: During the second half of the nineteenth century, manage-rial accounting development in Germany was based on micro-eco-nomic theory. In the twentieth century, the emphasis shifted to tech-niques and later to determination of "true cost", resulting in a highly developed system that had a major impact on other European coun-tries. The major difference between the German developments and those in the USA is the separation of cost (consumption/utilization of physical resources) from expenses. After WWII, interest centered on cost theory based on limitational rather than substitutional produc-tion functions. Gutenberg demonstrated various cost adaptation pat-terns as managements responded to output changes and created a sophisticated theory using indirect rather than direct output/cost re-lationships. This theory is little know in the USA and might stimulate theory research, particularly in the area of activity costing.
Managerial accounting as a tool for management decision making in Germany is closely tied to the development of ac-counting in general. In analyzing its development, it will be nec-essary to refer to financial accounting occasionally. To show distinctive steps in managerial accounting development, several periods will be analyzed: these include (1) the time before 1900,
(2) the period of early academic efforts until the mid-1930s,
(3) the period of government standardization and control until 1945, and (4) the period after WWII leading up to today's deci-sion-oriented management accounting. Since this paper ad-dresses an audience familiar with USA managerial accounting practice, only a survey is given and differences rather than com-mon ground will be emphasized to show the developments in Germany, which are independent — at least to a certain extent — of USA approaches.