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- Title
Commentary on 'Accounting for Inflation: The Dog That Didn't Bark'.
- Authors
Kothari, S. P.
- Abstract
The article discusses the limitations of historical cost accounting and the proposed alternative of general price level adjustment (GPLA) standards. It argues that historical cost financial statements are distorted under inflationary conditions, as they understate the cost of a firm's assets and overstate its debt obligations. However, the article suggests that GPLA standards have failed to gain traction because they cannot replace the assessments made by financial intermediaries and market participants. The author concludes that while historical cost accounting has its weaknesses, the alternative of GPLA has not proven to be superior.
- Subjects
PRICE level changes; PRICE inflation; ACCOUNTING standards; FINANCIAL statements; DOGS; COST accounting
- Publication
Abacus, 2024, Vol 60, Issue 1, p21
- ISSN
0001-3072
- Publication type
Article
- DOI
10.1111/abac.12317