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Accounting for inflation: a practical view


, : Accounting for inflation: a practical view. Euro Farm Business 3(4): 10-14

Traditional methods of accounting no longer give a true picture of profit and loss in a period where interest rates have more than doubled over ten years, the cost of feed has doubled in one year and other costs are showing similar violent changes. Two methods of dealing with the situation are outlined. The first is CPP (Current Purchasing Power) method and the second is the replacement cost method, also known as current value accounting.

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