Comprehensive income is the total of an entity's operating profits and holding gains recorded during a particular accounting period, encompassing both realized and unrealized gains.
Cost of Sales Adjustment (COSA) refers to an adjustment made to the trading profit of an organization due to a holding gain on the cost of sales, commonly within the framework of current-cost accounting.
Current-Cost Accounting (CCA) adjusts the value of assets and profits to account for changes in prices over time, providing a more accurate reflection of a company’s financial position.
Current-Cost Accounting (CCA) is an accounting approach focusing on the operating capability of a business, ensuring assets are valued to prevent business loss upon their deprivation. This method highlights adjustments for inflation and operational capacity, differentiating holding gains from operating profits.
Current-Cost Operating Profit is the amount remaining after adjustments for cost of sales, depreciation, and working capital in current-cost accounting.
Deprival value is an accounting concept reflecting the loss that a company would experience if an asset were deprived or removed, often aligned with current-cost accounting.
In current-cost accounting, the deprival value of an asset corresponds to the lower value between its replacement cost and its recoverable amount, which is the higher value between its net realizable value and net present value.
In current-cost accounting, a gearing adjustment is a financial modification that reduces the charge to the owners for the effect of price changes on depreciation, stock, and working capital. This adjustment is rationalized by the fact that a part of the extra financing is provided by the loan capital of the business.
A gain resulting from the length of time an asset has been held rather than its use in the operations of a business.
A comprehensive look at inflation accounting, its definition, examples, related terms, FAQs, online resources, and suggested books for further studies.
Real Terms Accounting (RTA) is a system of accounting where the effects of changing prices are measured by their impact on a company's financial capital, to ensure its value remains constant in real terms. This involves assessing assets at their current cost and defining profit as any surplus after maintaining shareholders' equity.
A committee led by Sir Francis Sandilands, established in 1975 by the UK Government to explore the appropriate methodologies for accounting the effects of inflation in company financial statements.
Working Capital Adjustment, specifically the term 'monetary working-capital adjustment', refers to the modifications done to the working capital of a business under current-cost accounting. It accounts for fluctuations in bank balances, overdrafts, and cash required to support daily operations.
