Hyperinflation Reporting and Performance Assessment
Journal of Financial Statement Analysis, Summer 1997
Posted: 15 Jan 1998
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: Suggested Citation