The Impact of Changing Prices on Financial Reporting

Date of Submission

1979

Document Type

Thesis

Degree Name

Master of Science in Accounting

Department

Accounting

Advisor

Lawrence Logan

LCSH

Financial statements--United States

Call No. at the Univ. of New Haven Library

AS 36 .N29 Acc. 1980 no.1

Abstract

Changing prices seriously distorts the conventional financial statements. Meeting the needs of financial statement users has been the focus on many groups recently. The qualities of reliability and relevance are foremost in many users' opinions. The conventional accounting model is seen as lacking in relevance in the face of rapidly changing prices. Constant dollar accounting is one answer to this distortion that sacrifices none of the reliability of the conventional accounting model. Others believe that current cost accounting has even more relevance than the above two models. A combination of constant-dollar accounting and current cost accounting is seen as having the best combination of reliability and relevance for financial information.

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