Accounting for Price-Level Changes—Theory and Procedures

Accounting for Price-Level Changes—Theory and Procedures

Pergamon International Library of Science, Technology, Engineering and Social Studies

1st Edition - January 1, 1966

Write a review

  • Author: R. S. Gynther
  • eBook ISBN: 9781483180977

Purchase options

Purchase options
DRM-free (PDF)
Sales tax will be calculated at check-out

Institutional Subscription

Free Global Shipping
No minimum order


Accounting for Price-Level Changes: Theory and Procedures shows the importance of taking actions to incorporate the effects of changing prices into each firm’s accounting systems, and encourage the firms to treat this incorporation as a normal routine. This book shows that prices have in fact been altering over the years, and then explains the problems of changing prices as they affect accounting. Then, this text demonstrates these problems with the aid of a few simple examples. This book also includes statements of professional bodies and proposals that have been advocated. The latter part focuses on other accounting methods and concepts, complemented with illustrative examples. This book will be beneficial to accounting practitioners and those working at business firms.

Table of Contents

  • Preface

    1 Introduction

    2 Price-level Statistics

    3 An Explanation of the Problem

    4 Some Examples of the Problem

    5 Statements by Professional Bodies

    The Institute of Chartered Accountants in England and Wales

    The American Institute of Certified Public Accountants

    The American Accounting Association

    The Institute of Cost and Works Accountants

    The Association of Certified and Corporate Accountants

    The Institute of Chartered Accountants of Scotland

    6 Types of Proposals that have been Advocated

    7 Profit Determination - The Index Problem

    The Matching Process and Profit Determination

    The Two Main Schools of Thought Concerning Indexes

    Why Are there Two Main Schools of Thought on Indexes?

    The Going Concern Concept Is Involved

    Some Arguments against Specific Indexes—and Some Rejoinders

    Use a Consumer Price Index?

    How Specific Should the Specific Indexes Be?

    Some Variations from the Above Specific and General Index Schools

    Indexes and "Objectivity"

    8 Asset Valuations - "Holding Gains and Losses"

    Asset Valuations

    Holding Gains and Losses

    Holding Losses Specifically

    What if Inventories Are Valued at Net Selling Prices?

    The "Good Buy"

    The Private Speculator


    9 Costs of Goods Sold and Inventories

    (a) Wholesale and Retail Firms Using Perpetual Inventory Systems

    (b) Manufacturing Firms Using Perpetual Inventory Systems

    (c) Retail and Wholesale Firms Using Retail Inventory Methods

    (d) Wholesale and Retail Firms Relying on Periodical Stock-takes




    10 Depreciation and Non-current Assets

    Plant Registers

    Depreciation Charges at Average Current Costs for the Period

    Recommended Procedures

    Accounting Entries for Recommended Procedures

    Retrospective Adjustment to the Depreciation Provision Account

    Accelerated Depreciation

    Intangible Assets-Goodwill


    11 Monetary Items

    "Holding Gains and Losses"

    Long-term Liabilities

    Preference Shareholders

    When Are the Profits and Losses on Monetary Items Realized?

    Which Index for Calculating Profits and Losses on Monetary Items?

    The Computation of Profits and Losses on Monetary Items


    Speculating in Commodities


    12 Profit: At Average for Period Prices or a Tend of Period Prices?

    13 An Illustrative Example - Including Changeover Procedures and Funds Statements

    Results in Conventional Historical Costs

    Change-over Procedures

    Results in Average Current Costs

    Protection of Capital

    General Index Concept of Profit

    Funds Statements


    14 Miscellaneous Matters

    Comparisons with Previous Periods

    Capital Reserve Accounts

    The Position of Ordinary Shareholders

    Company Taxation

    Advantages of Accounting in Current Prices

    The Auditor's Position

    15 Actual aAplications of Accounting in Current Costs - Philips Electrical Industries

    Philips Electrical Industries (N.V. Philips Gloeilampenfabrieken)

    Costs of Goods Sold and Inventories

    Depreciation and Non-current Assets

    Monetary Items



    16 Conclusion



Product details

  • No. of pages: 270
  • Language: English
  • Copyright: © Pergamon 2013
  • Published: January 1, 1966
  • Imprint: Pergamon
  • eBook ISBN: 9781483180977

About the Author

R. S. Gynther

Ratings and Reviews

Write a review

There are currently no reviews for "Accounting for Price-Level Changes—Theory and Procedures"