SVIBOR - Project code: 5-03-317

MINISTRY OF SCIENCE AND TECHNOLOGY

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SVIBOR

SVIBOR - Collecting Data on Projects in Croatia

Project code: 5-03-317


ELIMINATING THE EFFECTS OF INFLATION BY ACCOUNTING METHODS AND THE FIRMS'S FINANCIAL POLICY


Main researcher: DEŽELJIN, JADRANKA (9645)


Assistants
Type of research: applied
Duration from: 06/01/93. to 12/31/95.
Papers on project (total): 74
Papers on project quoted in Current Contents: 20
Institution name: Ekonomski fakultet, Rijeka (81)
Communication
Phone: 385 (0)51 332-777
Fax: 385 (0)51 512-178
Summary: The problem of deformations in accounting and financialstatements caused by inflation will be studied, and particularlyin showing the value of assets,debts, capital, expenditure andincome (financial result). In conection with that the accountingmethods and the way to use them will be established as well astheir reach and limitations. That will enable compiling financialstatements that will serve as a reliable information basis forsuccessful business decision-making under the conditions ofchanging levels of prices, all adapted to the internationalaccounting standards. A more acceptable financial policy underinflation conditions will be proposed and it will be in thefunction of maintaining and increasing the firm's financialpower. On the basis of the set research objectives one can expectthe contribution to the theory and practice of accounting (knowin the world as Inflation Accounting or Accounting underInflation Condition) and the theory and practice of BusinessFinance, consisting of the following: - establishingtheroretically and practically acceptable solutions inquantifying and eliminating by accounting the negative effects ofinflation in evaluating and balancing assets, debt, capital andfinancial results, - establishing theoretically and practicallyacceptable solution (concept and method) of eliminating negativeeffects of inflation in evaluating and balancing assets, debt,capital and financial results in specific inflatory conditions inthe Republic of Croatia, - establishing acceptable companyfinancial policy under inflatory conditions to be in thefunction of maintaining and building the company's financialpower. This presupposes permanent solvency, continuous ability offinancing as well as maintaining and increasing the company'sassets.

Keywords: Inflation Accounting, Accounting under Inflation Conditions, Financial Policy under Inflation Condition, Financial Statements

Research goals: A. PRIMARY OBJECTIVE The objective is to find theoretically and practically acceptable solution (concept and method) of eliminating by accounting the negative effects of inflation in evaluating and balancing assets, debts, capital, income and expenditure (financial result). This creates the possibilitiy for accounting-financial information and statements to be true, timely and reliable and as such to meet information needs for various users in making financial decisions. B. SECONDARY OBJECTIVES The secondary objectives of the proposed study, which are in the function of attaining the primary objective are the following: a) to indentify the main problems and deformations caused by inflation in accounting-financial statements and the firm's financial policy, b) to analyze and assess theoretical and practical solutions so far in eliminating negative effects of inflation, on the basis of financial statements in the world and in the Republic of Croatia, c) to suggest theoretical and practical solution (concept and method) of eliminating by accounting the negative effects of inflation in evaluating and balancing the condition and results, particularly in hyperinflatory conditions in Republic of Croatia.

COOPERATION - INSTITUTIONS


  1. Name of institution: Facolta di Economia e Commercio
    Type of institution: University/Faculty
    Type of cooperation: Joint publishing of scientific papers
    City: Trieste, Italija
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Last update: 10/12/95
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