price level accounting

Dictionary of Accounting Terms for: price level accounting
price level accounting

method of measuring the impact of changes in general purchasing power of the dollar. Inflation is measured and reported in the financial statements. Balance sheet and income statement accounts are restated to average current year dollars using the Consumer Price Index. Purchasing power gains and losses on monetary item are reflected in the price-level income statement.

Copyright (c) by Barron's Educational Series. Reprinted by arrangement with the publisher of this site.