ABSTRACT
James Leitch’s method of euialysis was to examine individual asset categories and discuss the possible application of replacement costs in each. The subject of the accountant and inflation undoubtedly represents one of those problems which ought to interest every accountant in the country and to which every accountant ought to be prepared to make some contribution. This chapter deals with some of the practical problems arising from the discarding of conventional accounting, particularly as they would affect the engineering industry. All expenditure incurred by a business, be it capital or revenue, in manufacturing a product or in giving a service, must be recovered either when it is incurred or over a number of years, otherwise the business would simply cease to prosper. Changes in the purchasing power of money are not limited to industry. Other sections of the community are affected and have a right to be considered.
