Who Was Luca Pacioli?

Almost everyone who has taken a basic accounting course has heard the name Luca Pacioli linked
with the beginnings of double-entry bookkeeping, but very few people know anything more about
this fascinating and very significant man. This article seeks to remedy that situation and illuminate
the fascinating early history of the profession. Little recognition is given to the fact that accounting is
just such an art form, and possesses fundamental elements of form and beauty. Accounting is often
defined as the language of finance, and is therefore a universal language. Most appropriately, the
early design, structure, and practice of bookkeeping and accounting began in Italy. During the
medieval period, it was a commercial nation—a trading nation—especially in the north. It appears to
have been destined to become a land of merchants becalise it is an immense peninsula, blessed with
a relatively long coastline, and located in the middle of the Mediterranean.

Double-Entry Bookkeeping Begins

The earliest discovered records based on the double-entry bookkeeping method were prepared in
Genoa in the year 1340. Just over two-thirds of a millennium has elapsed since then and,
remarkably, this double-entry system remains in use throughout the entire world without any
significant change. It has adapted wonderfully well to all of the changes that have occurred in
society, commerce, industry, and government during the intervening years, representing a superb
achievement. By 1340, commerce had been flourishing in Genoa for many years and the city was
wealthy and powerful, in good measure due to its very profitable trade with ports in the eastern
Mediterranean. Sound records were essential where large sums of capital and credit were being
employed. These records could, at the time, be more readily and competently kept when Arabic
numerals and computation methods were replacing the unwieldy symbols and numerals that had
been used by the Greeks and Romans. The now-famous 1340 financial record of the commune of
Genoa was kept by two city treasury officials, called "massari," with a duplicate kept by two maestri
razionali as a check on the work. These records were maintained in a double-entry format that
refiected each of the financial accounts in a debit column on the left-hand side and a credit column
on the right-hand side. Each financial transaction entry had equal debit and credit amounts. An
account for the city of Genoa served as equity or capital account representing the recorded net gain
or loss of the city's financial transactions. At the end of the year, the books were closed and an
income statement for the year was prepared.

Pacioli Enters the Scene

Many years would pass before a written description of double-entry accounting was first put into a
printed book. That took place in 1494, when Summa de Arithmetica, Geometría, Proportioiii et
Proportionalita by Luca Pacioli was published in Venice. The Summa, containing a slender tractate on
the bookkeeping process, "Particularis de Computis et Scripturis," which translates to "Details of
Accounting and Recording," was also the first printed work to discuss algebra. Pacioli is thought to
have been bom in 1445 into a lower-middle-class family in the small town of Borgo San Sepolcro in
Tuscany. His early education, a rigorous one, came from the Order of Franciscan Friars. This was
followed by an apprenticeship in a business capacity in his native town. Pacioli's later writings
indicate that he was well trained in speaking, writing, history, poetry, analysis, logic, arithmetic,
geometry, astronomy, and music. There followed a most meaningful period of supervised study
under the guidance of the artist Piero della Francesca, which was to have an impact on Pacioli's
entire career. This renowned artist had also been bom in Borgo San Sepolcro, in about 1416, and
achieved early fame in both nearby Urbino and then in Rome, where he did work for the papacy. In
the 1460s he worked mainly in his native town. There, he took pride in Pacioli, whom he influenced
greatly and who had similarly developed a penchant for mathematics and a great love of books.
Delia Francesca fostered Pacioli's love of books by introducing him to the extensive library of Duke
Federigo of Urbino, which della Francesca painted. Pacioli would go on to become acquainted with
many of the political, religious, military, and business leaders of his day, and to become a personal
friend of seven successive popes, from Paul 11 to Leo X.

In 1464, Pacioli went to Venice to tutor the three teenage sons of the prosperous merchant Antonio
de Rómpiasi. They were to follow in their father's footsteps, and thus Pacioli needed to study and
thoroughly understand business and commerce, arithmetic, and bookkeeping. This was facilitated by
his involvement .in business dealings in Venice and elsewhere and by his travels by ship, all on behalf
of Rompiasi. It was in Venice—a foremost commercial- city during the Renaissance, an active, highly
lucrative, ideally situated center of trade between the East and the West—that Pacioli was
introduced to double-entry books. This system originated somewhat later here than it had in Genoa
and in Florence, but it was further developed and perfected through the use of a journal and ledger
to record transactions and would, through Pacioli's efforts, become accepted as a universal model.

Making Connections

Six years later, Pacioli began a close association with the accomplished and acclaimed architect,
writer, and scholar Leon Battista Alberti, who came from a noted family and held high positions in
church administration. He went on to live in Rome for a year in the wealthy man's home. Rome at
that time was a small town compared to Venice, consisting largely of the ruins of past centuries. It
had greatly dimitiished in size over the years, such that large areas within the city walls had reverted
to overgrown fields and gardens. Alberti, along with della Francesca, introduced Pacioli to the
ecclesiastical hierarchy, including Francesco della Rovere, the newly elected Pope Sixtus IV, and his
28 year-old nephew Giuliano della Rovere, whom he had appointed a cardinal. Giuliano would later
invite Pacioli to live at his palace, would serve as his patron, and would eventually become Pope
Julius H. Alberti died in 1471 and Pacioli then sought to gain the support of the della Rovere family
by becoming a member of the Franciscan order and devoting himself to the study and teaching of
mathematics and theology. He thus came to be addressed as "fra" or "fi^ater," and as his university
students graduated, his fine reputation spread throughout the entire country. Pacioli taught
mathematics at the University of Perugia fi-om 1475 to 1480 and then again in 1487 and 1488. His
lectures stressed the importance of putting theory into practice, and among the wide range of his
mathematical discourses was the use of perspective in painting. At the time, mathematics was very
new to the curriculum as a distinct subject, and on at: least two occasions Pacioli was the first person
at a well-regarded university to hold a chair in that subject. Although relatively few in the full
student body chose the subject, Pacioli lectured to classes of 150 students. Pacioli spent much of the
1480s in Florence, where he associated with important artists and sculptors, such as della Francesca,
the Bellini brothers, Botticelli, Ghirlandaio, Verrocchio, and PoUaiolo. He interacted with them in
mutually advantageous ways, learning about their techniques and sharing his knowledge of
mathematics, perspective, and proportion. Pacioli was a practical man who studied many different
subjects throughout his life. Even though he had no talent for art, he trained himself in its technical
aspects so he would be in a position to learn from the leading painters, sculptors, and architects. In
1489 he taught in Rome and lived at the palace of Giuuano della Rovere. He then taught at the
University of Naples for three years in the early 1490s.

The Summa

The Summa de Arithmetica, Geometría, Proportioni et Proportionalita, published in 1494, was the
effort of a quarter century. It reflects the state of mathematics during the early Renaissance, and
was intended to give readers a good understanding of the subject matter for everyday use. In this
book, Pacioli mentions the names of about a hundred people whose works he had relied upon or
whom he had heard or had contacted with questions. He dedicated the Summa (or summary) to
Guidobaldo, who was then the Duke of Urbino, having succeeded his father, Fededgo. Charles
Nicholl, in his biography of Leonardo da Vinci, describes the Summa as "encyclopedic ... covering 600
close-printed pages in folio" {Leonardo da Vinci: Flights of the Mind, Viking, 2004). In the Summa,
Pacioli innovated by carefully and methodically explaining mathematics in a clear and interesting
way, doing the same in his writing as he had in his teaching. He was never a dull writer, for he
lightened technical matters with frequent acknowledgments, anecdotes, personal asides, and
comments on current matters. There were five sections in the Summa: 1) arithmetic and algebra; 2)
their uses in trade; 3) bookkeeping; 4) money and exchange; and 5) pure and specially applied
geometry. He was never an accountant or a bookkeeper; he included the section on bookkeeping to
make the Summa complete by recognizing that its practice required applying the principles of
arithmetic. The Summa was user-friendly, intended for practical application, and referred to by
Pacioli as a compendium of information. He never professed to be the creator of double-entry
bookkeeping; he stated repeatedly that it had been used in Venice for 200 years and that he chose
to write about the Venetian method because he felt it to be the best. He had the Summa
copyrighted and was among the first writers to take this significant step in protecting publication
rights. Henry Rand Hatfield, an eminent accounting teacher, historian, and author in the early 20th
century, lauded Pacioli's treatise on bookkeeping. "You will be interested in it, not merely as a piece
of technical literature, but because of its quaintness of expression, its naive attention to detail, its
exuberance of piety, its flavor of mediaevalism," he wrote. He also stated, "It is seldom the case that
a first book on a subject has so dominated its literature as was the case with Pacioli's 'De Computis
et Scripturis.'" Dutch, German, and English writers on the subject of bookkeeping were influenced by
the Summa in the 16th and 17th centuries, and the basic framework of the double-entry process
that Pacioli described has remained unchanged for more than 500 years.

Da Vinci and Divina

In 1496, Pacioli went to Milan primarily to serve as a mathematics teacher to the court of Milan but
also to write, research, and teach arithmetic, geometry, and mathematically based military tactics.
He continued to gather knowledge and personal experience useful to his teaching, and it was here
that he formed a strong friendship with Leonardo da Vinci. Duke Lodovico of Milan had assembled a
large group of scholars and teachers in order to build a center of learning, and both Pacioli and da
Vinci were a part of it. During this time, Pacioli visited da Vinci often to discuss the painting of the
Last Supper as it progressed. Da Vinci has written that he hastened to purchase a copy of Pacioli's
Summa as soon as it was published. Pacioli and da Vinci both had much to gain from their close
bond. Pacioli was a university graduate—whereas da Vinci was not—and also a professor. This made
it possible for him to go anywhere and to meet anyone he chose. Da Vinci's notebooks indicate that
he was learning mathematics from Pacioli, and often refer to him as "maestro Luca." Da Vinci, in
turn, was of valuable assistance to Pacioli in preparing 60 drawings of geometrical figures, such as
the prisms and pyramids modeled by Pacioli for the illustrations in the latter's book. De Divina
Proportione. In it, Pacioli states his belief that mathematics serves as the basis and entry point for
attaining knowledge of the other sciences, because mathematics is the initial certainty. Each portion
of the book contains phñosophical, theological, critical, and instructive remarks. The Divina's preface
praises da Vinci as "the most worthy of painters, perspectivists, architects, and musicians, the man
endowed with all the virtues." And while Pacioli referred to da Vinci as his dearest of ftiends, he
remained somewhat critical of da Vinci for not publishing his own work and passing on to others
what he had discovered. Pacioli prided himself on summarizing the accumulated knowledge of his
subject area in Italian instead of Latin, wherever feasible, so it could be more easily accessed by the
public. The Divina was much more literary than the Summa had been. It was prepared by Pacioli at
the suggestion of Duke Lodovico and was dedicated to him in 1497, as someone who was concerned
with the sciences and with education of the public and who was also a product of the court of Milan.

Later Years

In late 1499, Pacioli and da Vinci left Milan because Duke Lodovico was defeated by the invading
French, and they made a new home in Florence. Pacioli began teaching mathematics at the
University of Florence immediately upon his arrival, basing his lectures on the works of EucUd. In the
years that followed, he also taught at the universities of Pisa and Bologna while translating Euclid's
writings from Latin into Italian so that they would not be reserved only for scholars. He thus ushered
in a series of translations of mathematics by others in the 16th century. His translation of Euclid was
published in 1509 while he lived in Venice, and he then taught briefly at the University of Perugia.
Pope Leo X, a member of the Medici family and another old ftiend of Pacioli's, succeeded Julius H in
1513. At the pope's request, Pacioli soon began teaching at the University of Rome. Rome by this
time had become a larger and more prosperous city than it had been when Pacioli had first visited in
the 1470s, with a population estimated at 50,000. After the year 1514, nothing more is known about
Pacioli, and it is surmised that he died at the age of 70 in 1515. Pacioli biographer R. Emmett Taylor
encapsulates his accomplishments as follows: "Pacioli's great contribution to civilization consisted of
digging up old material on mathematics and putting it in shape for the use of modem students. He
was the first in modem times to make a science out of mathematics. He accumulated the accepted
knowledge on the subject and systematized and formulated it with reference to the discovery of
general truths and the operation of general laws." Pacioli was a pioneer in the teaching of
mathematics, an endeavor that engaged him for half a century, beginning in 1464— some 20 years
before printed texts were available. In his early writings, he mentions the lack of textual materials
for his students and thus he began, while still in his 20s, to prepare the needed texts. Pacioli and his
Summa have been held in high esteem by accountants since 1869, when a Professor Lucchini,
presenting a paper to the Academia dei Ragioneri at Muan, drew attention to the book, now
considered the most famous accounting work ever printed, and noted its brief section on the
concept of double-entry bookkeeping. Pacioli was the first to put this concept into print for the
purpose of presenting merchants and govemments with the rules for keeping all their accounts and
books in an orderly and effective manner. These simple rules have been referred to as one of the
most remarkable creations of the human mind, because they have been used continuously
throughout the world for hundreds of years to record the financial transactions entered into by
organizations of every kind and size. As a result, Pacioli has often been called "The Father of
Accounting." Alvin R. Jennings, a prominent accounting practitioner, managing partner of Coopers &
Lybrand, and past president of the AICPA, spoke about Pacioli in 1963 as follows: "Can any of us
ignore a personality who, almost five centuries ago, realized that theory was valueless unless it could
be put to practical use; who recognized that the truth was fundamental to a sound system of
accounts; who appreciated that character was the only sound basis for credit; who fully realized the
importance of internal control; who warned against those 'who keep their books in duplicate,
showing one to the buyer and the other to the seller;' who advocated auditing and who warned of
the pitfalls in dealing with govemmental agencies? "