Currently suggested systems of accounting for inflation are not the product of the 1970's but date back to the 1920's in Germany and the severe inflationary period witnessed there between 1920 and 1923. It was especially this German experience that aroused an interest in the accounting problems posed the heavily depreciated Mark, and believed to be approachable by striking at the very foundations of traditional accounting that are embedded in the stability of the unit of measurement. In the literature in English there are scattered references to the German accounting literature of the day, and this thesis attempts to provide in one volume a historical account of the long-neglected ideas of the German academic accountants whose work marked the beginning of the evolution of inflation accounting. In this thesis it is argued that the basic ideas of inflation accounting, which attempted to reflect the consequences of both general and specific price changes, were developed systematically and thoroughly by Schmalenbach, Mahlberg and Schmidt in 1921 in Germany, from where these ideas travelled to other countries, initially France and the U.S.A.