06-28-2007, 08:10 PM
<blockquote id="quote"><font size="1" face="Verdana, Tahoma, Arial" id="quote">quote<hr height="1" noshade id="quote"><i>Originally posted by Astute Accountant</i>
<br />Yes Nick, this really is a short coming of historical cost accounting that it doesnât take account of inflation and does assume that the currencies of the countries remain stable.
<hr height="1" noshade id="quote"></font id="quote"></blockquote id="quote">
Accountants world wide only assume that "the currencies of the countries remain stabale" as far a constant real value non-monetary items are concerned.
When they stop the stable measuring unit assumption, the whole world economy will operate at 0% inflation in non-monetary items.
Imagine that.
You will still have cash inflation, but, only if you keep monetary items over time.
Implement Real Value Accounting and keep no monetary items over time = 0% inflation world wide at any level of cash inflation.
Anyway, I think this is too much of a shock for accountants to handle.
As they say denial is a very human human characteristic.
<br />Yes Nick, this really is a short coming of historical cost accounting that it doesnât take account of inflation and does assume that the currencies of the countries remain stable.
<hr height="1" noshade id="quote"></font id="quote"></blockquote id="quote">
Accountants world wide only assume that "the currencies of the countries remain stabale" as far a constant real value non-monetary items are concerned.
When they stop the stable measuring unit assumption, the whole world economy will operate at 0% inflation in non-monetary items.
Imagine that.
You will still have cash inflation, but, only if you keep monetary items over time.
Implement Real Value Accounting and keep no monetary items over time = 0% inflation world wide at any level of cash inflation.
Anyway, I think this is too much of a shock for accountants to handle.
As they say denial is a very human human characteristic.
