THE FRENCH APPROACH TO THE POST-WAR PRICE LEVEL PROBLEM.
In view of the American price level problems, which are currently much debated within the accounting profession, the attempted solutions of a similar problem in France should be of interest to American accountants. Following each of the two World Wars France experienced inflations far more severe than the slight inflationary price trends of the United States during the last twenty years. During the two decades following the First World War France went through a gradual but persistent inflation. In the years following the Second World War the inflationary trends assumed alarming proportions mainly because the several short-lived French governments of that time did not succeed in enforcing a sufficient degree of monetary discipline. French methods of revaluing assets attempted the elimination of price level effects from the financial statements by using price level coefficients, which were based on wholesale price indices of commodities, which largely determine the cost of most fixed assets. The French method, therefore, attempted to eliminate only inflationary price level effects of the selected commodities reflected in the revaluation coefficients. Price changes caused by shifts in demand or changes in technology are eliminated only when reflected in the combined index.
- DOI
- 10.2308/tar-7103478
- Volume
- 38 (2)
- Pages
- 382-388
- Language
- en
- Export
- BibTeX
- Sources
- openalex crossref