上海金融学院会计学院财务管理系.pptVIP

International Accountingand Multinational Enterprises 上海金融学院会计学院财务管理系 王 纯 International Accounting for Price Changes International Accounting for Price Changes Inflation Inflation is a worldwide problem with a sometimes devastating impact Impact of Inflation on Corporations Monetary assets lose value Holding monetary liabilities is beneficial The effect on non-monetary assets is reflected on the balance sheet and income statement: The balance sheet book value do no represent the current cost of assets; Expenses based on historic cost will understate expenses based on current cost; and These effects may cause liquidity problems. Impact of Inflation on Corporations (Cont.) Accounting Measurement Alternatives Current Value Accounting Utilities specific price indices rather than overall purchasing power indices; Historic costs are not restated but are replaced by current values; and Two Major Approaches used: Replacement Cost Net Realizable Value Current Value Accounting (Cont.) Current value accounting results in non-monetary assets holding value gains and losses: Gains and losses may be either reflected in the income statement or as a balance sheet capital adjustment, Current values are determined as follows: Inventories - Supplier lists Fixed Assets - Specific industry indices Real Value Accounting: Combines general purchasing power accounting and current value accounting. International Accounting Standards IAS 15 discusses the two major accounting alternatives. Outlines recommended accounting disclosures with regard to inflation adjusted statements; Supplemented by IAS 29 - reporting in hyperinflationary economies; and IAS 16 - Deals specifically with current value accounting. Comparative National Regulation and Practice National practice relate to degree of inflation in the economy. South American nations - Well developed system exists for inflation adjusted financial statements. U.K. - Provided for adjustments: Depreciation; Costs of Saves; Monetary Worki