CASE STUDY ON RE-ADJUSTMENTS DEPENDING ON PRICE MODIFICATION
Inflationary moments, characterized by significant price rises, have proved that accountingsystems based on historical costs provide a distorted image of the reality: the elements ofthe balance sheet are under-valuated, and the stock-related expenses and amortization in theprofit and loss account ar...
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| Format: | Article |
| Language: | English |
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Vasile Goldis University Press
2011-01-01
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| Series: | Studia Universitatis Vasile Goldis Arad, Seria Stiinte Economice |
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| Online Access: | http://www.uvvg.ro/studiaeconomia/images/2001/v2/13.%20CASE%20STUDY%20ON%20RE-ADJUSTMENTS%20DEPENDING%20ON%20PRICE%20MODIFICATION.pdf |
| Summary: | Inflationary moments, characterized by significant price rises, have proved that accountingsystems based on historical costs provide a distorted image of the reality: the elements ofthe balance sheet are under-valuated, and the stock-related expenses and amortization in theprofit and loss account are also under-valuated. Under these circumstances, the result isover-valuated, and its distribution leads to allotments from the company’s capital. In thispaper we draw up a case study with regards to the methods used for adjusting pricemodification, clearly outlining, through a comparative analysis, the main differencesbetween the accounting system based on historical cost and inflation accounting. |
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| ISSN: | 1584-2339 2285-3065 |