Relevant Reporting Of A Mining Company's Financial Results In An Inflationary Environment

CIM Bulletin, Vol. 71, No. 790, 1978

John F. Dougherty and lan McDougall, Inco Limited, New York, N.Y.

Recently, there has been much debate as to the relevance of reporting financial results using the conventional accounting systems, which is based on historical costs, during a period of rapid inflation. In the following paragraphs, the symptoms, if not the causes, of inflation, its detrimental effect on the financial soundness of business in general and the financial reporting changes being advocated to overcome perceived weaknesses in the present financial reporting system in accounting for the effects of inflation will be reviewed. Finally, a course of action as a sound approach to the financial reporting problem will be recommended.
Keywords: Mineral economics, Financial results, Inflation, Accounting, Reporting.