W is for Wedgwood

Wedgwood “Jasperware.” Photo from House Beautiful.

There is something in me that loves a good chart. I can’t help it. Some people are stopped short by a pair of soulful eyes or a kitten sleeping, but give me a good table of figures, and I am hooked.

Josiah Wedgwood, manufacturer of pottery to English royalty, must have felt the same way because he was a pioneer in cost accounting. Not only that, but he designed beautiful dishes.

Wedgwood cost breakdown. Neil McKendrick, Josiah Wedgwood and Cost Accounting in the Industrial Revolution, 1970.

Bad Knee, Big Brain

Wedgwood was born in 1730, the 11th child of a potter who transformed his father’s small, midland English artisan studio into a manufacturing empire. He survived smallpox, though it left him with a knee too weak to run a potter’s wheel. As a result, he concentrated on design and gravitated towards glazes. He stumbled on to the latest science–chemistry–and that allowed him to transform the cheap, black bowls of the family shop into multi-colored, sophisticated figurines and dinnerware for aristocrats. He married someone who had money and found business partners with connections into high society. It paid off.

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V is for Value

What’s it worth to you?

What’s the value of a stock? A toy? A flower? A work of art?

“Beeple” Winklemann, “Everydays–The First 5000 Days.” $69 million.

There are financial valuation models that explain how to set prices for goods in the “market” and for stocks on the exchange. But every time something sells for surprising sums of money, like $69 million for an NFT artwork, we should be reminded about how prices really work.

Value is always in the eyes of the buyer.

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U is for Useful Life

Most of us want to have a long Useful Life, except when it comes to accounting. Then, we might want our Useful Life long or short, depending on who’s asking.

After the invention of writing, which I’m taking credit for on behalf of all accountants throughout history, the idea of depreciation may be the most significant contribution to the way businesses operate. It’s certainly the most “accounting-y” notion and an Accountant’s Full Employment Act, since even the simplest calculation takes years.

This depreciation graphic was too bizarre to resist. Is he upset at the potted plant? the building? the time value of money? Design courtesy of capital.com.
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