Traditional historical cost

Reference no: EM13138511

Assignment
In recent times, there has been a case of accounting for changing price, from the traditional historical cost accounting to more "appropriate" methods. The problem with historical cost accounting according to Elliot is that "an implicit and troublesome assumption in the historical cost model is that the monetary unit is fixed and constant over time". As students would probably know, historical cost accounting assumes that money holds a constant purchasing power.
Task.
You are firstly required to provide an argument identifying the limitations of historical cost accounting, identifying the limitations. You should consider the areas of rising prices, changing prices, operating results and even capital maintenance in your answer. Then consider the areas of Current Cost Accounting, Exit-price Accounting, Current Purchase Power Accounting and Continuously Contemporary Accounting. What are they, what are the advantages and disadvantages of each and then draw a conclusion as to what you feel is the best option and why.
Marks will be given for presentation of report, research, content and articulation of your findings.

Reference no: EM13138511

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