Current Cost Accounting - Management Duniya

Current Cost Accounting

Current cost Accounting:

The value of an item may be increased on the basis of general price index where as the actual value of that item might have decreased. To remove this drawback the Govt of UK setup a committee under chairman ship of MR. Fransis Sandilands to consider the problem of price level accounting. In its report published in sep. 1975, the committee recommended the adoption of current cost accounting for dealing with the problem of inflation accounting.

In this method historic values of items are not taken into account. Rather current values of individual items are taken as the basis for preparing P&L a/c & Balance sheet. Thus items are not adjusted as a result of the change in the general price level as they are adjusted the CPP method.

Source: A/c Books & Notes

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By: Management Duniya