inflation

[Stuart McGraw]

Frank H. Ellenberger wrote:
> 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. ;-)

Interesting trick which I will keep in mind for the future,
thanks.

But my main interest was not in simply adjusting reports
mechanically for inflation but finding out if there are
any special account procedures that are used in high-
inflation times.

I am just starting to use gnucash and thought, if there
are such procedures (perhaps involving extra accounts, etc)
then it might be easier to set things up that way now then
try to adjust my setup later.