Hyperinflation Reporting and Performance Assessment

Journal of Financial Statement Analysis, Summer 1997

Posted: 15 Jan 1998

See all articles by Frederick D. S. Choi

Frederick D. S. Choi

New York University; National Bureau of Economic Research (NBER)

Ronald R. Gunn

BS Continental S.A.

Abstract

Generally accepted accounting principles are poorly adapted to describe economic reality for companies operating in hyperinflationary environments. Traditional reporting systems report large exchange gains or losses that are difficult to interpret, mismatch revenues and expenses, greatly overstate interest income and expense, and do not resolve the implicit interest problem. Financial statement users are thus provide an unreliable basis for, evaluation of a business. The transaction-based reporting model described here overcomes many of these deficiencies. Examination of reported numbers in disaggregated fashion is central to the model presented, showing that with a little additional effort conventional accounting data can be transformed into information useful to a range of financial statement users.

JEL Classification: M41, M44, E31

Suggested Citation

Choi, Frederick D. S. and Gunn, Ronald R., Hyperinflation Reporting and Performance Assessment. Journal of Financial Statement Analysis, Summer 1997, Available at SSRN: https://ssrn.com/abstract=53365

Frederick D. S. Choi (Contact Author)

New York University ( email )

40 West 4th Street, Suite 400
44 West 4th Street
New York, NY 10012-1118
United States
212-998-0402 (Phone)
212-995-4221 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Ronald R. Gunn

BS Continental S.A.

Sao Paulo
Brazil

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