Difference between historical cost accounting and inflation financial statement
Answers
Features of the Current Cost Accounting (CCA) Method
The salient features of this method are:
Fixed assets are shown not at their depreciated original cost but at their net replacement value.
Stocks are shown at their net replacement value.
Depreciation is calculated at the current value of assets.
Gain/ loss due to the changes in the price level are shown in a separate statement.
Inventory consumed is valued at the price at the date of consumption.
inflation financial statements,:
The in the inflation rate causes an in income statement and and in the balance sheet, because during inflation a high level of employment is reached, therefore, workers are able to ask for and receive higher wages. As a result, prices of goods and services increase.
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