It is related along with the adjustment in the value of assets that is current and fixed and of income in the light of changes in the price level. In a manner, this is related with the overcoming of restrictions that happen in financial statements in account of the cost assumption which is recorded the assets at their original or historical cost and the assumption of stable monetary component, these are discussed in explanation in the next section. This aims at accurate the distortions in the reported outcomes caused through price level varies. Generally, rising prices during inflation have the distorting affect of overstating the profit. Different approaches have been suggested to deal along with this issue.
If this topic of introduction of HRA and Inflation accounting provokes you to identify more regarding them, we suggest you pay attention to the audio programmed "Emerging Horizons in Accounting and Finance-Part II and III" that deal along with these two topics. You may also study "Money Measurement Idea" explained in the next section that has a bearing on inflation accounting.