As the basis for far-reaching decisions on the capital, labor, consumer and supply market, accounting records influence our economic life to no small degree. These decisions are made of course, upon the assumption that the data recorded in the accounts are relatively correct. In an economy in which the government exercises due care with its fiscal and economic policy and protects the currency from loss of value, the accounting data can generally be relied upon; however, in times of inflation, as well as in times of deflation, the accounting system fails to show correct figures. This unreliability is due to the presupposition upon which the accounting system works: namely, that the unit of currency is always equal in value regardless of time. That this reliance upon historical cost can lead to undesirable results has been demonstrated very well in the Twentieth Century when most of the European countries experienced extreme inflation following World War II. Austria was one of the countries which experienced such an inflationary period. Here, however, sweeping changes were made in the income accounting for tax purposes. These changes had a marked effect upon and were greatly responsible for stabilizing the financial structure which has formed the basis for the greatly improved economy Austria is enjoying today.

In this article, the author analyzes some of the unique accounting practices in foreign countries. A study of international accounting practices reveals an array of methods and procedures. Some nations still use the primitive accounting techniques which most industrialized nations considered outmoded fifty years ago; on the other hand, a number of nations now employ the most advanced accounting methods, supported by up-to-date laws. International accounting is important because it gives us the opportunity to study historical accounting methods supported. More than that, however, one can learn from the failures and successes of nations that have applied accounting methods different from ours to solve many of the same problems now facing people. The relative merits of flexibility as compared with uniformity of accounting principles, procedures and methods have been under much discussion in the United States. Although there is no space here for detailed investigation, it is interesting to note that there are still three nations in which complete or partial uniformity was or is still required by law.

The article explores the concepts of financial position held by various groups interested in a business and attempts to determine whether or not the balance sheet as presently constituted can serve these different groups. Creditors in general view the information given in the balance sheet concerning assets, liabilities, and equity from a different point of view than that of management or owners. Therefore, a balance sheet of value to creditors must incorporate information that will allow them to judge a debtor's financial position and that will thereby, meet the creditors' concept of financial position. Within the owners' group, as within tile creditors' group, there are several concepts of financial position to be developed the relationship of the owner to the enterprise has an important bearing upon the owners' interpretation of financial data. Because of the large number of management groups, each with special interests, no uniform concept of financial position can be developed, nor can these groups be classified for this purpose under one or two simple headings. Each group will necessarily have its own concept of financial management.

Reviews the book "Construction Accounting and Financial Management," by William E. Coombs and William J. Palmer.

Reviews the book "The Cost of Capital," by Wilbur G. Lewellen.