Inflation accounting

Inflation accounting comprises a range of accounting models designed to correct problems arising from historical cost accounting in the presence of high inflation and hyperinflation.[1] [2] For example, in countries experiencing hyperinflation the International Accounting Standards Board requires corporations to implement financial capital maintenance in units of constant purchasing power in terms of the monthly published Consumer Price Index. This does not result in capital maintenance in units of constant purchasing power since that can only be achieved in terms of a daily index.

  1. ^ Street Words: An A to Z Guide to Investment Terms for Today's Investor, David L. Scott.
  2. ^ [1] Inflation Accounting: Sandilands Report - May I also ask 297 him to assure us that, when this new system of current cost accounting is introduced, these new realistic figure will be used for the purposes of company taxation, and not the historic cost figures, which are totally meaningless at a time of high inflation.