国际会计学第六版chapter7知识讲解.pptVIP

International Accounting, 6/e;Learning Objectives;Do adjustments for changing prices vary internationally? What does IAS 21 have to say about inflation adjustments in hyperinflationary countries? What is the restate-translate controversy all about? Is it possible to double-count for the effects of foreign inflation? ;What Does “Changing Prices” Mean and How are Price Changes Measured?;Specific price change: refers to the movement in the price of a specific asset; e.g., a change in the price of inventory, plant, or equipment. Specific price changes are measured by a specific price index (SPL). SPL is a cost ratio that compares the cost of a specific item with its cost in a prior or base period.;Why are Financial Statement Potentially Misleading During Periods of Changing Prices?;Deducting expenses based on historical purchasing power from revenues that expressed in currency of current purchasing power yields a nonsensical index of performance. ;Why are Financial Statements Potentially Misleading During Periods of Changing Prices? (contin);From a managerial perspective, accounting numbers unadjusted for changing prices distort: Financial projections Budget comparisons Performance data ;Types of Adjustments for Changing Prices;Revenues would be $1,500 received uniformly over the period, expenses would be $1,000, and net income would be $500. Net income of $500 represents the amount that could be withdrawn from the firm and leave the owners with their original investment intact. ;General Price Level Adjustments ;To keep up with inflation, owners’ equity should grow by at least $210; i.e., beginning equity = $1,000 x 121/100 = ending owners’ equity of $1,210. To accomplish this, revenues are expressed in end of period purchasing power by multiplying $1,500 by 121/110 (110 is used as an expedient to reflect the fact that revenues are received uniformly over the year).;Expenses (cost of sales in this example) would also be expressed in end of period purchasing power by m