theorychapter4规范会计理论-物价变动会计为例共42页
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PPT t/a Carnegie et al; Financial and Organisational Decision Making Aust. PPT t/a Financial Accounting Theory by Deegan4.1
Chapter 4: Accounting for changing prices
PPT t/a Carnegie et al; Financial and Organisational Decision Making Aust. PPT t/a Financial Accounting Theory by Deegan4.3
Chapter 4: Accounting for changing prices
Limitations of historical cost in times of rising prices
• Historical cost assumes money holds a constant purchasing power
• three components of the economy which make the assumption less valid than when historical cost was developed:
Learning Objectives
– Evidence that the calculation of income pursuant to a particular method of accounting will depend on the perspective of capital maintenance that has been adopted
PPT t/a Carnegie et al; Financial and Organisational Decision Making Aust. PPT t/a Financial Accounting Theory by Deegan4.5
Chapter 4: Accounting for changing prices
– specific price level changes (shifts in consumer preference; technological advances)
– general price level changes (inflation) – fluctuation in exchange rates
– a number of alternative methods of accounting that have been developed to address problems associated with changing prices
– some of the strengths and weaknesses of the various alternative accounting methods
Support for historical cost accounting
• Predominant method used today so tended to maintain support of profession
• if not found useful business entities would have abandoned it
Definition of Income
PPT t/a Carnegie et al; Finwk.baidu.comncial and Organisational Decision Making Aust. PPT t/a Financial Accounting Theory by Deegan4.2
Chapter 4: Accounting for changing prices
PPT t/a Carnegie et al; Financial and Organisational Decision Making Aust. PPT t/a Financial Accounting Theory by Deegan4.4
Chapter 4: Accounting for changing prices
• problem of additivity • can overstate profits in times of rising prices,
with distribution of profits leading to an erosion of operating capacity • including holding gains which accrued in previous periods in current year’s income distorts the current year’s operating results
Limitations of historical cost in times of rising prices - continued
• problem of relevance in times of rising prices
– asset’s current value may be different from historical cost
Chapter 4: Accounting for changing prices
Learning Objectives
• In this chapter you will be introduced to
– some particular limitations of historical cost accounting in terms of its ability to cope with various issues associated with changing prices
Chapter 4: Accounting for changing prices
PPT t/a Carnegie et al; Financial and Organisational Decision Making Aust. PPT t/a Financial Accounting Theory by Deegan4.3
Chapter 4: Accounting for changing prices
Limitations of historical cost in times of rising prices
• Historical cost assumes money holds a constant purchasing power
• three components of the economy which make the assumption less valid than when historical cost was developed:
Learning Objectives
– Evidence that the calculation of income pursuant to a particular method of accounting will depend on the perspective of capital maintenance that has been adopted
PPT t/a Carnegie et al; Financial and Organisational Decision Making Aust. PPT t/a Financial Accounting Theory by Deegan4.5
Chapter 4: Accounting for changing prices
– specific price level changes (shifts in consumer preference; technological advances)
– general price level changes (inflation) – fluctuation in exchange rates
– a number of alternative methods of accounting that have been developed to address problems associated with changing prices
– some of the strengths and weaknesses of the various alternative accounting methods
Support for historical cost accounting
• Predominant method used today so tended to maintain support of profession
• if not found useful business entities would have abandoned it
Definition of Income
PPT t/a Carnegie et al; Finwk.baidu.comncial and Organisational Decision Making Aust. PPT t/a Financial Accounting Theory by Deegan4.2
Chapter 4: Accounting for changing prices
PPT t/a Carnegie et al; Financial and Organisational Decision Making Aust. PPT t/a Financial Accounting Theory by Deegan4.4
Chapter 4: Accounting for changing prices
• problem of additivity • can overstate profits in times of rising prices,
with distribution of profits leading to an erosion of operating capacity • including holding gains which accrued in previous periods in current year’s income distorts the current year’s operating results
Limitations of historical cost in times of rising prices - continued
• problem of relevance in times of rising prices
– asset’s current value may be different from historical cost
Chapter 4: Accounting for changing prices
Learning Objectives
• In this chapter you will be introduced to
– some particular limitations of historical cost accounting in terms of its ability to cope with various issues associated with changing prices