inflation

[Frank H. Ellenberger]

Am Freitag, 29. August 2008 20:56:16 schrieb Stuart McGraw:
:
> One area I expect inflation would affect is year-to-year financial
> comparisons.  If inflation is 15% per year, a revenue report might
> show a 15% increase when in fact there has been no real revenue
> growth.  If the purpose of financial reports is to provide an accurate
> picture of a business (or person's) financial condition (including
> changes) then clearly it is failing to do so in an inflationary
> environment. I was guessing that this is something accountants
> may have developed some standard ways of adjusting for.  But I
> can understand if this is beyond the scope of gnucash.

As others wrote, accounting is usually done in the local currency of your home 
country.

But I think, there is a way, how you could get your reports:
There is a currency XXX - No Currency, which can be misused for many things.
If you do not need it for other stuff, you can do the following:

Choose a year as reference year and currency, let us say USD of 2000-01-01.
* Enter 1 XXX = 1 USD with that date in your price db.
* Get the annual inflation rates of your country from a serious source like 
oecd.org.
* For the following years enter entries on 1. Jan., with 
1 XXX = 1 last_XXX * (1 + inflationrate) USD
* Edit->Preferences->Reports->Report currency: XXX
Then your reports should show you everything in values of USD_2000-01-01.

But don't forget to switch it back to real "worthless" money. ;-)

Regards
Frank