ABSTRACT
FINANCIAL accounting in this country, apparently since its first appearance on these shores, has been anchored by the notion of historical cost. Net income for the great majority of firms has been determined to be the excess of (realized) revenues over historical costs that can reasonably be said to have “expired” as a proximate result of the generating of those revenues.1 Necessarily, numerous conventions have been developed to effectuate the application of this income-determination process. One of the several assumptions that underlie the process provides that historical costs are not to be reinterpreted in the light of subsequent changes in the economy-wide exchange value of the monetary unit.
