Introduction
Selected Pronouncements that have attempted
to deal with the problems caused by Inflation
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APB Statement No. 3, issued in 1969
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ASR No. 190, issued in 1976
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FAS Statement No.33, issued in 1979
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FAS Statement No. 89, issued in 1986
Problem:
The continued assumption of a stable monetary unit when the fact is the
value of the monetary unit changes over time due to inflation. The fact
that the monetary unit is not stable is well recognized by accountants,
but there is disagreement concerning the theoretical and practical means
of adjusting for it.
Two widely discussed
methods of coping with the changing value of the monetary unit are:
a.
general price level adjustments
b.
current cost