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Among various economic activities, agriculture stands as an outstanding source of livelihood to more than half of the world population directly or indirectly. Yet, incorporation of accounting practices in this sector has not been developed fully in many countries including India. 85% of Indian farmers are small (Agriculture Census, 2010-11) and most of them fall under the subsistence category. Perhaps, this is the reason for low application of farm accounting in the country. Bryer (2003) brought out a significant relationship between the spread of capitalist mentality with that of practicing accounting in the farms. His conception is based on the evaluation of modernized farm practices. In the history of world, modernized farm accounting was first practiced in England during the period 16th-17th century. Interestingly, this is the period when the “rate of return mentality of socialized merchant capital and the capitalistic farmer’s mentality of exploiting wage labor in production” emerged, as explained by Karl Marx. Thus, it is evident that when commercialization in farm sector took place as a result of capitalistic mentality, accounting practices automatically underpinned the event. This is also supported by the modern day examples of the US, Canada and some European countries. These are the countries where farm accounting is seen flourishing with the growth of commercial farms.
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