The accurate measurement of acoustic nonlinearity parameter β for fluids or solids generally requires making corrections for diffraction effects due to finite size geometry of transmitter and receiver. These effects are well known in linear acoustics, while those for second harmonic waves have not been well addressed and therefore not properly considered in previous studies. In this work, we explicitly define the attenuation and diffraction corrections using the multi-Gaussian beam (MGB) equations which were developed from the quasilinear solutions of the KZK equation. The effects of making these corrections are examined through the simulation of β determination in water. Diffraction corrections are found to have more significant effects than attenuation corrections, and the β values of water can be estimated experimentally with less than 5% errors when the exact second harmonic diffraction corrections are used together with the negligible attenuation correction effects on the basis of linear frequency dependence between attenuation coefficients, α2 ≃ 2α1.