ABSTRACT
A Current Cost approach to accounting is useful, if not essential, in the managerial decision-making process in what we have seen up to this point first because it is Current Real Income, representing the change in real financial wealth of the entity and its owners, that the entity and its owners may be presumed to wish to maximize over time. The authors' central aim is to try to ascertain and understand ways in which a Current Cost/Constant Dollar approach can serve the management decision-making process in meeting its need for performance measurement. Even more important, perhaps, the separate components of Current Real Income and their relationship to the prevailing current asset values, offer management very useful information and insights about how matters are developing as events unfold. The authors' discussion of the evaluation process with respect to management investment decisions up to this point has concerned situations where only the price of the assets being invested in changes.
