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DEPRESSION BALANCE SHEETS AND PRESENT DAY VALUES

DEPRESSION BALANCE SHEETS AND PRESENT DAY VALUES. W . Hasenack . Market values. The present period of deflation  testing as much as a period of inflation. Are the market values in balance sheets during the present crisis would lead to practical? . View points market values.

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DEPRESSION BALANCE SHEETS AND PRESENT DAY VALUES

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  1. DEPRESSION BALANCE SHEETS AND PRESENT DAY VALUES W. Hasenack

  2. Market values • The present period of deflation  testing as much as a period of inflation. • Are the market values in balance sheets during the present crisis would lead to practical?

  3. View points market values • The price calculations • Operating results in the accountans.

  4. Price calculations • The theory is recognized today by the majority of theoritical economists. • Considering the acquisition cost  the only true and real factor. • Market value for the price computations can be proven with mathematical exactness  although can result in vain fictions, frequently prove to be ecconomically insufficient.

  5. The Case

  6. The dilema when clossing books

  7. Aplication principles (Prof. Fritz Schmidt) • All differences between the nominal cash outlays and the nominal cash revenues can be absorbed as far as they do not represent genuine profits of losses, but have the natural of capital value fluctuations do the cyclical or economic causes.

  8. Reorganization • The sort of reorganization of the accounting system, as is recognized by most criticss, would involve considerable extra work, because it would require the correction of value for each sale.

  9. Periodically adjustments • Outlays costs into repruductions values as of the balance sheets date. • Converting into the many different replacement costs as of the days of sale.

  10. The question • Has the merchant, in a critical period, like the present, really set his balance sheet in proper order when he avoids showing “fictitious losses”? • Fictitious losses are the differences between the high cost prices and the low reproduction cost on the day of sale. • Would the method of adjusting values to abasis of reproduction or market value neutralize or offset all the present day causes of losses in their effect on the profit and loss account?

  11. Charge the value

  12. Consideration • The present crisis is in no way decrease by merely aplying Schmidt’s theory of using reproduction values, or Schmalenbach’s and Mahlberg’s method of correting balance-sheet value  by the use of index number to show the present financial condition of businesses.

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