References
- See the Report of the Inflation Accounting Committee, F. E. P. Sandilands, chairman (The Sandilands Committee) Cmnd. 6225 London: HMSO (1975); The Accounting Standards Committee, Exposure Draft 18, Current Cost Accounting (30 November 1976) and The Accounting Standards Committee, Inflation Accounting—an interim recommendation (The Hyde Guidelines) (4 November 1977).
- Report of the Inflation Committee, para. 166.
- Ibid., para. 584.
- Ibid., para. 596.
- Ibid., para. 597.
- Ibid., para. 603.
- The Consultative Committee of Accountancy Bodies, ‘Initial Reactions to the Report of the Inflation Accounting Committee’ . Accountancy , December : 92 – 96 .
- The purpose of these assumptions is to avoid complicating the analysis with calculations of the loss (or gain) from holding net monetary assets or liabilities. In the model, only the loss (or gain) resulting from the periods operations are considered. However, if the assumptions are relaxed the basic principles will be unaffected. It would then be necessary to compute the loss (or gain) from holding net monetary assets (or liabilities) through the period. See later discussion of the growth in monetary working capital.
- Alternative assumptions may be adopted. However, the assumptions must be consistent with the purchasing power adjustments used for fund flow from operations and for inventory replacement. Provided consistent assumptions are followed the results of the analysis will be unaffected.
- It may be noted that gains or losses on long-term monetary assets or liabilities will not fall into this category.