ABSTRACT
Fluctuation of prices which solely alters the price relations (fluctuation in real value) belong in our opinion to normal market conditions; to meet and to utilise those fluctuations is a matter for the undertaking concerned. In theory, completely separate treatment is necessary for permanent alteration of price levels which have their origin not in a shifting of price relations, but in an alteration of money value. Recently, such reserves have been formed on a wider basis to neutralise profits and losses resulting solely from alterations in money value. These ‘substance maintenance reserves’ are intended to prevent the exhaustion of the enterprise which would otherwise automatically follow continuously rising price levels. With registered companies, alterations in the nominal capital can only be carried through under certain formalities. On account of the difficulties which arise on repeated changes in the capital of companies, the building up of reserves is the only practical course to pursue.
