The Effects of Hyper-inflation on Accounting Ratios: Financing Corporate Growth in Industrial Economies, Volume 23
World Bank, Jan 1, 1997 - Business & Economics - 37 pages
IFC Technical Paper No. 3.Inflation plagues many of the developing countries in which the International Finance Corporation (IFC) operates. To date, however, little is known about the impact of inflation on the financial statements of firms in developing countries. The authors of this study have developed a simple algorithm, based on the method of inflation accounting used in Brazil, and have applied it to the accounts of listed companies in Turkey for the period 1982-90. The paper documents an inflation-induced bias in financial statements and introduces a methodology for adjusting corporate financial statements for inflation effects.
What people are saying - Write a review
We haven't found any reviews in the usual places.
Other editions - View all
adjusted figures adjustment for inflation algorithm applied Asset Growth asset values Brazil Brazilian method calculation closing balance sheet closing net assets company accounts contribution of equity currency units date of acquisition deduction denominator depreciation charge Earnings Before Tax equity financing variable external finance Finance of Growth financing of corporate fixed assets gain on borrowing gain or loss gearing growth of long-term historical cost accounts holding money inflation accounting inflation adjustment l+i)t long-term debt long-term liabilities loss on holding Malaysia measurement bias method of inflation Mexico monetary assets numerator opening net assets peoa plausible post-tax price index price level Price-Earnings Ratio profit and loss Q2 MEDIAN HIGHEST rate of inflation rate of return re-stated by reference real assets real gain retained profits Retention Ratio sample countries Singh and Hamid specific index specific price Stock and Flow stockmarket Table Turkey Turkish companies Turkish corporations Zimbabwe