PRESENTATION

Sub:Topic:Accountancy Accounting concepts

INFLATION ACCOUNTING
Introduction

Traditionally, only monetary trasactions are recorded in books of accountancy. But, in modern age due to competition price wars are increased day-by-day. In the 1970s, prices have increased at much faster annual rate in comparison with second post-war period. In many countries, including India, the price raise was 15% per annum. Thus, the need to bring out the impact of inflation infinancial position of the business.

MEANING
Fesibility of accounting for price level changes is called as a inflation accounting. On the other hand, inflation accounting means that type of accounting system which record effect of inflation in books of accountancy.

EFFECT OF FINANCIAL STATEMENT

Profit and loss account will show more profit than actual profit because depriciation provision is inadequate and the closing stocks are progressively valued at higher price due to inflation. o As profit and loss account shows more profit and illusory profit than the true profit, more amount of income-tax and dividend would be paid. o Balance sheet will not exhibit the true state of affairs or business because fixed assets are shown at the historicalcost while current assests are shown at current cost. o Depreciation on fixed assets is provided on basis of historical cost of assets acquired. However, due to the increase in price level during this period, the amount of provision for depreciation would be totally inadequate to replce the asset.
o

Methods to show effect of inflation

Putting a Note in Accounts

Replacement Reserve Method

Partial Change Method

Current Purchasing Power Method

Current Cost Accounting Method

HUMAN RESORCE ACCOUNTING

Introduction Human beings are most valuable assets of the business. It is responsibility of busines that aquire, maintain and develop human resource in business. If they purchase smallest asset then it recorded in business but large amount of money spent on aquiring and developing human resource are not recorded in book of account. Therefore, to provide meaningful information to their stakeholders company show their human assetsin their financial statement.

DEFINITION
According to American Accounting Associations Committee of HumanResource Accounting (1973), human resource accounting is the processof identifying and measuring data about human resources and communicating this information to interested parties.

Mehods of Valuing Human Resource

Historical Cost Basis Method Replacement Value of Persons M ethod Expected Realisable Value Method

SOCIAL RESPONSIBILITY ACCOUNTING

Intorduction In recent times, it is now belived that the responsibility of business manager is not only to earn maximum profits for its owners, but they owe some responsibility to the society aslo. Now the success of a business enterprise is not evaluated on the basis of profitability only, but the management is being held responsibility for social problem too. It is now therefore, not accepted that only the business earning maximum profit is the most successful one. The extent to which they have fulfilled their social obligation is now also considered.

MEANING
Reporting about the steps taken by management to fulfill its social reponsibility and effects of these measures on society may be termed as social responsibility accounting.

Net income contribution Human resorce contribution Scope of social responsibility Public contribution Environmental contribution Product or service contribution