CASE STUDY ON RE-ADJUSTMENTS DEPENDING ON PRICE MODIFICATION
CASE STUDY ON RE-ADJUSTMENTS DEPENDING ON PRICE MODIFICATION

Summary/Abstract: Inflationary moments, characterized by significant price rises, have proved that accounting systems based on historical costs provide a distorted image of the reality: the elements of the balance sheet are under-valuated, and the stock-related expenses and amortization in the profit and loss account are also under-valuated. Under these circumstances, the result is over-valuated, and its distribution leads to allotments from the company’s capital. In this paper we draw up a case study with regards to the methods used for adjusting price modification, clearly outlining, through a comparative analysis, the main differences between the accounting system based on historical cost and inflation accounting.

• Details
• Contents