They are: 1 The financial statements lose their credibility as the objectivity concept is violated.
The medium of expression is the money value. Yet, there are a number of objections to inflation accounting. Too much calculations make complications.
The chapter would further explain the research design, the population which the study would cover, the research sample and the specific method of data collection employed. Historical, research involves the interpretation narration or description of past events of facts writer in a spirit of critical enquiring for the truth.
It would be interesting to know what our capital will do in the telephone business construction price indexing ; but before we entertain ideas about reinvestment, we want to know what has happened to our purchasing power capital.
This assumes that for the output sold in a particular year the beginning of the year inventory is used up first, and onlvthen the purchases of materials during that year are utilised.
The Board of Directors must make sure that they are not unintentionally distributing earnings from past years. Reviewing the selected literature. An additional form of the budget—the requirement budget may need to be prepared, as is presently being done by a few organizations.
Secondly, problems may arise when inflation adjustment financial statements are to be compared from one period to another. The public understanding of the business and the various effects of inflation goes up.