Accounting for inflation
Inflation sales is a term reporting a range of sales systems designed to correct problems that comes from traditional cost sales in the use of inflation. Inflation sales is used in nations around the world suffering from high inflation or hyperinflation For example, in nations around the world suffering from hyperinflation the Worldwide Accounting Expectations Panel needs business fiscal reports to be altered for changes in buying power using a price catalog.
Under a traditional cost-based system of sales, inflation causes two primary problems. First, many of the traditional statistics showing on fiscal reports are not financially appropriate because prices have modified since they were received. Second, since the statistics on fiscal reports signify dollars consumed at different points of time and, in turn, incorporate different volumes of buying energy, they are simply not preservative. Hence, including cash of $10,000 presented on January 31, 2002, with $10,000 which represents the price of area obtained in 1955 (when the price range was considerably lower) is a doubtful function because of the considerably different amount of buying energy showed by the two statistics.
Inflation sales are not fair value sales. Inflation sales, also called cost range sales, are similar to transforming fiscal reports into another currency using an exchange rate. Under some (not all) inflation sales models, traditional expenditures are converted to price-level altered expenditures using general or specific cost spiders.

Posted Date: 2/8/2012 6:17:58 AM | Location : United States

Ask an Expert

Related Discussions:- Accounting for inflation, accounting, Assignment Help, Ask Question on Accounting for inflation, accounting, Get Answer, Expert's Help, Accounting for inflation, accounting Discussions

Write discussion on Accounting for inflation, accounting
Your posts are moderated

Write your message here..

Related Questions

Factorial anova , Assessment Two tests your ability to conduct a factorial ... Assessment Two tests your ability to conduct a factorial ANOVA and make appropriate decisions regarding any follow up comparisons. The following data set is adapted from Jaccard an

Research design, Hi there, I am designing a research study for my undergrad... Hi there, I am designing a research study for my undergrad in Online Relationship. I am having some trouble with my professor accepting my proposed research model and survey questi

Statistics study, Find a statistics study (from a newspaper article, journa... Find a statistics study (from a newspaper article, journal, research study, or online article) and describe the five-step process of the study. (Hint: it may help to identify the f

Construct the frequency distribution, 1) Here we are given a raw data and w... 1) Here we are given a raw data and we are supposed to construct the frequency distribution of that data and plot the histogram of it. The dataset contains the values from 1 to

Statistics, Mention the characteristics of Statistics. Explain any two appl... Mention the characteristics of Statistics. Explain any two applications of Statistics.

Example on cluster sampling, "A company of accountants has branches in fiv... "A company of accountants has branches in five regions, Port Louis (PL), Curepipe (CPE), Beau Bassin (BB), Rose Hill (RH) and Quatre Bornes (QB). It employs the following number

State unemployment tax, State unemployment tax Condition government aut... State unemployment tax Condition government authorities provide lack of employment solutions and figure out conditions lack of employment tax amount for each company. (Some not

How audit works , A methodical selection of the adequate, qualified evident... A methodical selection of the adequate, qualified evidential issue needed to verify the equity of management''s claims in the fiscal reports or to assess whether management has wis

Calculate the cost of owning and leasing, Bugsy?s Haulers, is considering t... Bugsy?s Haulers, is considering the purchase or lease of a fuel tanker. The Purchase Option The purchase price is R4 000 000. This will be paid off as follows: R2 5

Tally, what is meant by tally what is meant by tally