Question
1a) The idea that a regular annual inflation rate of 35 per cent requires CPP adjustments, but a regular annual inflation rate of 25 per
1a) The idea that a regular annual inflation rate of 35 per cent requires CPP adjustments, but a regular annual inflation rate of 25 per cent does not, is quite absurd. Discuss.
1b) To what extent do current purchasing power adjustments to historical cost figures lead to up-to-date valuations in a balance sheet?
1c) In current purchasing power accounting,
I) Why it is necessary to consider monetary assets separately from non-monetary assets?
ii) why will holding monetary assets lead to a purchasing power loss, but holding non-monetary assets does not lead to a purchasing power loss?
1d) What are some of the major strengths and weaknesses of current purchasing power accounting?
1e) What are some of the major strengths and weaknesses of historical cost accounting?
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