ABSTRACT
This chapter explores how it is possible to construct a comprehensive reporting system which combines cash flows and exit prices within an exit price framework, and have applied this to published data for British Airways from 1975 to 1985. Early accounting concentrated on reporting the cash outcomes of transactions, but as accounting developed, the pattern of cash inflows and cash outflows was modified by the accruals or matching concept to yield a profit figure supposedly indicative of business performance. Conventional financial accounting records the conversion of input costs to exit prices for every completed transaction, but utilises potential exit prices for incomplete transactions only as byproduct or as a form of prudence. The Income Statements articulate with Balance Sheets in the usual manner, although allocation based charges such as depreciation are replaced by 'price-variation' charges. Over the years British Airways has been subject to great deal of interference by governments in pursuit of their own political and economic objectives.
