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Playing Accountant

From: Derek A. Neighbors
Subject: Playing Accountant
Date: Mon, 19 Mar 2001 10:10:16 -0800
User-agent: Mozilla/5.0 (X11; U; Linux 2.2.18pre17 i686; en-US; 0.8) Gecko/20010215

I have been playing accountant for a day or two and had a question for our resident experts...

It is given that money is the common factor in business transactions, thus the only practical unit of measure that can produce financial data that can be compared. Now of course you have different monetary units (currencies) etc, but you can convert to make comparisions.

Here is the question. We treat a dollar (or monetary unit) as a 'standard of measure'. However this seems like a bad thing to do.


Today 1 meter = 1 meter or 1 foot = 1 foot. In 60 years 1 meter = 1 meter and 1 foot = 1 foot.

However, I can not say 1 dollar = 1 dollar and 1 franc = 1 franc. In 60 years 1 dollar = 1 dollar and 1 franc = 1 franc.

This of course is due to the voliatle nature of purchasing power. Things like inflation and other factors adjust the relevance of the measurement. Now it appears that accountants accept the fact that there is a moving target and tend to deal with it off hand.

So my question is should we allow a way to account for such factors in our reporting etc?? Kind of a monetary unit restatement? For what its worth Im not an accountant, but would like to hear opinions.

Derek  Neighbors
GNU Enterprise

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