Up to the middle of the nineteenth century, most businesses were not too large or complex. They carried their inventories at cost and by the first-in first-out method. The problem was one of physical count and extension at the last invoice prices. Several authors of accounting books believed that the market values of assets should not be ignored and should at least be mentioned, probably by footnote in the balance sheet. During that time, the statement of financial condition was considered more important than the profit and loss statement, because the latter statement was merely used to prove the correctness of the change in the proprietary interest in the balance sheet. In 1929, the American Institute of Accountants reaffirmed the lower of cost or market rule for inventory valuation. In 1943, the Research Department of the American Institute made a survey of members of its Committee of Accounting Procedure for the purpose of formulating rules for inventory pricing. According to replies, it is evident that there was some agreement on application of the lower of cost or market value. However, the study reflects quite a bit of evidence indicating differences of opinion on many points in connection with that method of valuation and its application.

Professional accountants have long been divided on the question whether a charge for depletion should or should not be made in connection, with the preparation of financial statements for mining corporations. This division of opinion is noted particularly in accounting for non-ferrous metal mining corporations. Although the mining industry accounts for only about two percent of the total national income, the subject of depletion accounting is of sufficient theoretical as well as practical importance to merit adequate solution by the profession for the benefit of the investment public, management and the practitioner in the field of accounting. The public accountant expresses an opinion in his certificate as to the fairness of the financial statements as a result of application of generally accepted auditing procedures and based on consistent application of generally accepted accounting principles. However, that opinion is affected by those of experts in other professions in regard to financial areas which are not within the province of the auditors knowledge. Obviously, one of those areas requires the opinion and knowledge of mining engineers and geologists as to mine property, extractable yield and its exhaustion or depletion.