Inflation accounting, also called general price level accounting, is the adjustment of a company’s financial
statements to reflect inflationary economies. The purpose of these adjustments is to provide users of financial statements with a more accurate view of a company’s financial position under changing price levels. However, this type of accounting can also create issues with financial reporting, such as misleading financial statements. Like many other accounting promulgations, there are advantages and disadvantages to inflation accounting. Consider the U.S. and international inflation accounting promulgations. Determine the conditions of compliance for inflation accounting. Think about the advantages and disadvantages of inflation accounting within a multinational company.
Write a 3- to 5-page paper analyzing the U.S. and international promulgations for inflation accounting. In your analysis, explain the conditions of compliance for inflation accounting. Evaluate the advantages and disadvantages of inflation accounting within a multinational company.