10   ASC 255 CHANGING PRICES

Perspective and Issues

Definitions of Terms

Concepts, Rules, and Examples

Elective Disclosures

Other Sources

PERSPECTIVE AND ISSUES

Subtopic

ASC 255, Changing Prices, contains one subtopic:

  • ASC 255, Overall, that provides guidance on reporting the effects of changing prices or inflation

Scope

The topic applies to business entities that prepare US GAAP financial statements and “foreign entities that prepare financial statements in the currency for which the operations and that operate in countries with hyperinflationary economies.”

The ASC disclosures are encouraged, but not required.

DEFINITIONS OF TERMS

Consumer Price Index for All Urban Consumers. An index of price level changes affecting consumers generally often used to measure changes in the general purchasing power of the monetary unit itself.

Current Cost-Constant Purchasing Power Accounting. A method of accounting based on measures of current cost or lower recoverable amount in units of currency, each of which has the same general purchasing power. For operations in which the dollar is the functional currency, the general purchasing power of the dollar is used and the Consumer Price Index for All Urban Consumers is the required measure of purchasing power. For operations in which the functional currency is other than the dollar, the general purchasing power of either the dollar or the functional currency is used (see paragraphs 255-10-50-45 through 50-47).

Fair Value. The price that would ...

Get Wiley GAAP 2014: Interpretation and Application of Generally Accepted Accounting Principles now with the O’Reilly learning platform.

O’Reilly members experience live online training, plus books, videos, and digital content from nearly 200 publishers.