INDEX

accounting, accrual- 64-66, 69, 72, 74, 79 beta coefficients 156 accounting, cash flow (CFA) - 63, 85 business profit 46 accounting, current cost (CCA) -1,60,94 accounting, current value - 29, 197 capital administrative statement 144 accounting, financial- 3, 18, 23, 30, 33, 40, 63, capital-income statement 105 67,71,72, 145, 148-152, 154, 159, 179,200 capital market efficiency 171, 172 accounting, general purchasing power - 1 capitalized earnings value 125 accounting, goodwill- 72 cash flow accounting (CFA) 63, 85 accounting, historic - 68 cash flow reporting 63 accounting, historical cost - 23, 63 causal methods 201 accounting, human resources - 137 commitments 48-53, 55, 57, 76 accounting, inflation -1,89,95, 137, 197 company's capitalisation rate 88 accounting, management - 30,33, 148 concept of continuity 17 accounting, managerial - 3 concept of current costs 30 accounting, present value - 125 concept of current income 44 accounting, price-Ievel- 4, 64 concept of current value 30 accounting, replacement cost - 176 concept of interest 145 accounting, replacement value - 1, 197 concept of owners' equity 130 accounting, venture - 15 concept of replacement 30 accounting approach 39 conventional accruals accounting model accounting concept of income 45, 46 (CAAM) 87 accounting concept of profit 114, 115, 130, 131, conversion factor 9, 11 137,139 corporation tax 95, 96 accounting convention 33, 39, 40 cost objective 151 accounting income 45 cost of equity capital 150, 155 accrual accounting 64-66, 69, 72, 74, 79 cost of interest 145 accrual-based accounting system 70 current cost 6, 14,27,53,54,76,86, 151, 174 accrual-based annual report 78 current cost accounting (CCA) 1, 60, 94 accrual-based reporting system 76 current holding gains 47, 48,51,53 accrual basis 72 current income 45 accrual system 70 current operating income statement 20 all-inclusive income statement 20 current operating profit 46, 48, 59 approximation approach 45 current value 3, 6, 29, 68, 75 auditors' certificate 144 current value accounting 29,44, 197 current value department 31 backlog depreciation 34 balance sheet approach 8, 14 debt/equity ratio 147, 165 balance sheet concept 86 decisions on expansion 45 behavioral approach 19 deferred income tax 28 behavioral theory of the firm 16 depreciation-as-cost 141 224 INDEX

depreciation charge 175, 177 going concern 53, 54, 86, 130, 140, 141,200 differential effect of taxes 59 going concern concept 17, 19 disposal value 130 going concern (concept of) profit 112, 133, 134 dividend determination 11 goodwiII 52, 56 goodwiIl, subjective - 49 earned income 139 goodwiII accounting 72 earning cycles 33 economic approach 8, 33, 38, 40, 44 Hicksian income 88, 90 economic basis of replacement value accounting historic accounting 68 12 historic cost 28, 36, 38, 68, 74, 86, 169, 174, 181 economic concept of income 44-46 historic cost basis 38 economic concept of profit 112, 115 historic cost statements 179 economic income 54, 55, 60 historic cost valuation 36 economic position 107, 122 historic value 7 economic replacement 23 historical cost accounting 23, 63 economic value 139 holding gains 7, 13,24,27,34,37,43,44,45,75, effects of inflation 9 76 efficient market concept 182, 183, 197 holistic concept of the firm 16 efficient market hypothesis 184 human resources accounting 137 entity concept 150 entry price 46 ideal management information system (MJ,S,) entry value 53 29 equity debt leverage ratio 27 imputed cost 154 equity interest 153 income administrative statement 139 equity rate 156, 158 income distribution statement 139, 141, 142, 144 ex ante balance sheet 105 income tax 147, 163 ex ante economic income 55 inflation 1, 85, 98, 99,129,141,174,176,179 ex ante returns 138 inflation accounting 1, 89, 95, 137, 197 exit price 46 inflation-historical cost 179 exit value 53, 65, 80, 84, 170 interest pool 160 expansion-neutral income taxes 56 inventory profit 175 expansion path 45 investment center 107, 117, 118, 125 expected future values 88 investment control 138, 140 ex post economic income 55 ex post valuation 12 leverage factor 203, 211 liquidation value 130 factor prices 200 final dividend 49 management accounting 30, 33, 148 financial accounting 3, 18,23,30,33,40,63,67, managerial accounting 3 71,72, 145, 148-150, 152, 154, 159, 179,200 market price 171 financial forecast 197 market value 66 financial leverage 12, 14, 22, 24 market value of shares 197 financial ratios 77 monetary items 14 forecasting techniques 201 money time preference rate 67 funds statements 70 negative hidden reserves 136 generally accepted accounting principles 137 net capital value 131, 133 general price level adjusted cost 169 net current value 49 general price level adjusted historical cost net financial income 46 (GPLAC) 176 net plant account 176 general price level index 177 net present value method 105, 112 general purchasing power 27 net realisable value 10, 73 general purchasing power accounting 1 noise 174, 175 INDEX 225 noncausal methods 201 realized expenditure 140 non-identical replacement 14 realized holding gains 47 non-monetary assets 6, 10 realized income 47, 59, 139, 140, 170 realized income statement 139, 144 operating cycle 147 realized internal interest 131 operating income 50, 177 realized profit 130 relative price changes 86 PIE ratio 197 replacement cost 34, 38, 69,141,169,174,175, plant profit 175 178 plough-back 91, 92, 99 replacement cost accounting 176 portfolio management 186 replacement price 22 portfolio performance 186 replacement value 3, 137, 181 present capitalized value 8 replacement value accounting 1, 197 present value 8, 45,50-53,58,66,90, 105, 107, retained earnings 164 169, 170 retrospective approach 105 present value accounting 125 return on investment 131, 138 present value of investment center 107, 108, 111. return on total invested capital 28 120, 121 return to shareholders 87, 89 price-level accounting 4,64 risk 125, 156, 157, 186 prime debt rate 156 prime equity rate 146, 159 share price 171 profit-centre performance 148 statement of capital administration 142 profit forecast 198 stock market 85 profit retention 91 stock market efficiency 181 proprietary concept 150 stock market transparency 182, 187, 188 prospective approach 105 stock price 181 prospective balance sheet 112 subjective goodwill 49 prospective profit and loss account 112 supplementary statement 11, 22,122 prospective statements 105 purchasing power 86 tax neutrality 86 purchasing power of the equity 21 purchasing power of the organization 20 uniformity 191 unrealized holding gain (loss) 38 rate of return on equity 91 unrealized values 105 ratios 27,36,77, 147, 165, 197 realizable value 13, 69 value of proprietorship wealth 85 realization principle 12, 14, 178 value theory 13 realized business profit 7 venture accounting 15 realized cash flows 108, 112, 113, 117, 120, 123 voting rights 189 realized contribution margin 140