INFLATION ISSUESAnalysts must addre

INFLATION ISSUES
Analysts must address the following issues when reading inflation-adjusted accounts:
(1) whether constant dollars or current costs better measure the effects of inflation,
(2) the accounting treatment of inflation gains and losses, (3) accounting for foreign inflation, and (4) the combined effects of inflation and foreign exchange rates. We discuss the first and third issues together.

Inflation Gains and Losses
Treatment of gains and losses on monetary items (i.e., cash, receivables, and payables) is controversial. Our survey of practices in various countries reveals important variations in this respect.
Gains or losses on monetary items in the United States are determined by restat- ing, in constant dollars, the beginning and ending balances of, and transactions in, all monetary assets and liabilities (including long-term debt). The resulting figure is disclosed as a separate item. This treatment views gains and losses in monetary items as different in nature from other types of earnings.
In the United Kingdom, gains and losses on monetary items are partitioned into monetary working capital and a gearing adjustment. Both figures are determined in relation to specific (not general) price changes. The gearing adjustment indicates the benefit (or cost) to shareholders from debt financing during a period of changing prices. This figure is added (deducted) to (from) current-cost operating profit to yield a dispos- able wealth measure called “current-cost profit attributable to shareholders.”
The Brazilian approach, no longer required, does not adjust current assets and liabilities explicitly, as these amounts are expressed in terms of realizable values. However, as Exhibit 7-6 shows, the adjustment from netting price-level adjusted perma- nent assets and owners’ equity represents the general purchasing-power gain or loss in financing working capital from debt or equity. A permanent asset adjustment that exceeds an equity adjustment represents that portion of permanent assets being financed by debt, creating a purchasing-power gain. Conversely, an equity adjustment greater than the permanent asset adjustment denotes the portion of working capital financed by equity. A purchasing-power loss is recognized for this portion during an inflationary period.
SSAP No. 16 has great merit in dealing with the effects of inflation. Along with inventories and plant and equipment, an enterprise needs to increase its net nominal monetary working capital to maintain its operating capability with increasing prices. It also benefits from using debt during inflation. However, the magnitude of these phenomena should not be measured in general purchasing power terms because a firm rarely, if ever, invests in an economy’s market basket. We believe that the purpose of inflation accounting is to measure the performance of an enterprise and enable anyone interested to assess the amounts, timing, and likelihood of future cash flows.
A firm can measure its command over specific goods and services by using an index to calculate its monetary gains and losses.18 Because not all enterprises can construct firm-specific purchasing-power indexes, the British approach is a good

18 Frederick D. S. Choi, “Foreign Inflation and Management Decisions,” Management Accounting 58 (June 1977): 21–27.


practical alternative. However, rather than disclose the gearing adjustment (or some equivalent), we prefer to treat it as a reduction of the current-cost adjustments for depreciation, cost of sales, and monetary working capital. We think that current-cost charges from restating historical-cost income during inflation are offset by the reduced burden of servicing debt used to finance these operating items.

Kết quả (Việt) 1:

VẤN ĐỀ LẠM PHÁTNhà phân tích phải giải quyết các vấn đề sau khi đọc điều chỉnh lạm phát tài khoản:(1) cho dù hằng số đô la hoặc hiện tại chi phí biện pháp tốt hơn những ảnh hưởng của lạm phát,(2) kế toán điều trị lạm phát lợi nhuận và mất mát, (3) chiếm nước ngoài lạm phát, và (4) những ảnh hưởng kết hợp của tỷ lệ lạm phát và ngoại hối. Chúng tôi thảo luận về các vấn đề đầu tiên và thứ ba với nhau.Lạm phát tăng và thiệt hạiĐiều trị của lợi nhuận và thua lỗ vào các mặt hàng tiền tệ (tức là, tiền mặt, khoản phải thu, và payables) là gây tranh cãi. Chúng tôi khảo sát của các thực hành các quốc gia khác nhau cho thấy các biến thể quan trọng trong sự tôn trọng này.Lợi nhuận hoặc lỗ vào các mặt hàng tiền tệ ở Hoa Kỳ được xác định bởi restat-ing, hằng số đô la, bắt đầu và kết thúc các số dư của, và giao dịch tại, tất cả tiền tệ tài sản và trách nhiệm pháp lý (bao gồm các khoản nợ dài hạn). Con số kết quả tiết lộ như là một mục riêng biệt. Điều trị này xem lợi nhuận và thiệt hại trong các mặt hàng tiền tệ như là khác nhau trong tự nhiên từ các loại thu nhập.Tại Anh Quốc, lợi nhuận và thiệt hại tiền tệ mục được phân chia thành vốn lưu động tiền tệ và một điều chỉnh đòn bẩy tài chính. Cả hai con số được xác định trong quan hệ với thay đổi (không chung) giá cụ thể. Việc điều chỉnh đòn bẩy tài chính cho thấy lợi ích (hoặc chi phí) cho các cổ đông từ nợ trong một khoảng thời gian của việc thay đổi giá. Con số này sẽ được thêm vào (trừ) để (từ) hiện tại chi phí lợi nhuận hoạt động để mang lại một dispos - sự giàu có thể đo lường được gọi là "hiện tại chi phí lợi nhuận nhờ cho các cổ đông."The Brazilian approach, no longer required, does not adjust current assets and liabilities explicitly, as these amounts are expressed in terms of realizable values. However, as Exhibit 7-6 shows, the adjustment from netting price-level adjusted perma- nent assets and owners’ equity represents the general purchasing-power gain or loss in financing working capital from debt or equity. A permanent asset adjustment that exceeds an equity adjustment represents that portion of permanent assets being financed by debt, creating a purchasing-power gain. Conversely, an equity adjustment greater than the permanent asset adjustment denotes the portion of working capital financed by equity. A purchasing-power loss is recognized for this portion during an inflationary period.SSAP No. 16 has great merit in dealing with the effects of inflation. Along with inventories and plant and equipment, an enterprise needs to increase its net nominal monetary working capital to maintain its operating capability with increasing prices. It also benefits from using debt during inflation. However, the magnitude of these phenomena should not be measured in general purchasing power terms because a firm rarely, if ever, invests in an economy’s market basket. We believe that the purpose of inflation accounting is to measure the performance of an enterprise and enable anyone interested to assess the amounts, timing, and likelihood of future cash flows.A firm can measure its command over specific goods and services by using an index to calculate its monetary gains and losses.18 Because not all enterprises can construct firm-specific purchasing-power indexes, the British approach is a good

18 Frederick D. S. Choi, “Foreign Inflation and Management Decisions,” Management Accounting 58 (June 1977): 21–27.


practical alternative. However, rather than disclose the gearing adjustment (or some equivalent), we prefer to treat it as a reduction of the current-cost adjustments for depreciation, cost of sales, and monetary working capital. We think that current-cost charges from restating historical-cost income during inflation are offset by the reduced burden of servicing debt used to finance these operating items.