The reflections of changes in general level of prices on the range of relevance and reliability of accounting information in investment decision making: field study in some of Iraqi corporations. | ||
| AL-dananeer | ||
| Article 1, Volume 1, Issue 9, September 2018, Pages 474-505 | ||
| Author | ||
| Dr. Muhanad Majeed Talib | ||
| Abstract | ||
| In this research, we will analyze the conceptual and operational features of (GPL) general price-level accounting information and the means of providing such information.This research consists of the restatement of historical-cost financial statements prepared in accordance with general purchasing power known of general price-level accounting,or general price-level adjusted, historical-cost accounting.This school differs from current-value accounting and historical-cost accounting in its complete renunciation of stable monetary unit postulate.Also, it should be emphasized at the outset that general price-level accounting are competing alternative measures for dealing with problems created by inflation.General price-level accounting reflects changes in the general price-level : current-value accounting reflects changes in the specific price-level.In general price-level accounting, the change in the unit of measure is measured changes in the purchasing power of the Iraqi Dinar are measured by means of index number it is the ratio of a similar group of goods or services on a given date and the average price of a similar group of goods or services on another given date, such indices are used to restate the historical-cost based amounts on the financial statement, assume that a firm's : balance sheet maybe divided in to monetary items and non-monetary items and restatement of historical-cost amounts in traditional financial statements into units of general purchasing power.The following steps are necessary: 1. Obtain the complete set of historical-cost financial statements 2. Determine and obtain an acceptable general price-level index on which data on the index numbers. 3. Classify each item on the balance sheet as a monetary or a non-monetary item. 4. Adjust the non-monetary items by a conversion factor to reflect the current general purchase power. 5. Calculate the general purchasing power (general-price-level change) gains or losses arising from holding monetary items. To achieve objectives of this research and complete practical part, we used analytical and descriptive approach for collecting data related to the practical part, we used questioner to collect primary data related subject of this research, and analyzes data by SPSS statistical program and use of statistical processors and test, for getting signs to support subject of research. After that, the research provided a set of recommendations the most important about effect to company using of Historical Cost Account to proper financial statement. | ||
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