Current cost accounting : it's concepts and its uses in practical terms / Christina S.R. Drummond and Alan D. Stickler

Includes index.

Chapter 1. Understanding current cost accounting -- Chapter 2. An Overview of the standard -- Chapter 3. Estimating current cost of inventories and property, plant, and equipment -- Chapter 4. Cost of sales -- chapter 5. Depreciation -- Chapter 6. Changes in current cost of inventories and property, plant, and equipment -- Chapter 7. Financing adjustment -- Chapter 8. Purchasing power gain or loss on monetary items -- Chapter 9. Consolidated subsidiaries and equity-accounted investees -- Chapter 10. Extra ordinary items -- Chapter 11. Comparative Figures -- Chapter 12. Explanatory comments -- Chapter 13. Specialized industries -- Chapter 14. Presentation of current cost information -- Chapter 15. A Case Study.

Current cost accounting is change, and change is seldom achieved easily. Frequently change is also unpopular because it is part of human nature to resist it and to stay with the known and accustomed way. Current cost accounting is no exception to these ancient truths. The Canadian Institute of Chartered Accountants has issued a standard on current cost accounting which embodies change. The fact that the standard could be described as one of the longest and most complicated standards to find its way into the CICA Handbook is really incidental. So too is the controversy which has surrounded and still surrounds the subject of current cost accounting. The debate on inflation accounting has gone on for many years and is not resolved yet. How should financial reporting fulfil its purpose in the face of inflation and of changing prices? What are the costs? What are the benefits? We have taken our part in that debate. Now the time has come for theoretical debate to give way to practical experiment and practical experience. No one can learn to swim without getting in the water. The basic questions remain to be answered; the answers must be found, but above all they must recognize the practicalities of day-to-day business operations. In its concept, the current cost accounting standard represents a completely new system of accounting. It is true the system draws heavily on long-established accounting principles, and in fact retains more of them than it discards. But the concept centers on new constitutions of profit, or the determination of distributable profit, which challenge the traditional basis of accounting. Paradoxically, it may seem, it does not change the amount of profit earned when measured over the total life cycle of a business, because that is ultimately determined by the amount of cash realized. What it does change - and sometimes dramatically - is the incidence of profit in the different periods within that life cycle.