Contents

Preface About the Authors Acknowledgement

1. Introduction 1.1 Background 1.2 Statement of the Problem 1.3 Rationale of the Study 1.4 Importance of the Study 1.5 Objectives of the Study 1.6 Hypotheses for the Study 1.7 Scope of the Study 1.8 Organisation of the Study 2. Corporate Financial Reporting
2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 2.9 2.10 3.1 3.2 3.3 3.4 4. 4.1 4.2 4.3 4.4 4.5 4.6 5. Introduction Objectives of corporate financial reporting Users of published financial reports Information need of stakeholders Which are useful information? Constraints on Relevant and Reliable Information Financial Reporting across the World Harmonisation of Accounting Standards Corporate Reporting Practices in India Summary Introduction History of Inflation Accounting with Special Reference to India Inflation Accounting and Indian Economic Development Methods of Accounting for Inflation Inflation Accounting: A Review from Research Perspective Introduction Impact of Inflation on Financial Performance Impact of Inflation on Major Financial Ratios Impact of Inflation on Stakeholders Applying Models to Measure Impact of Inflation Summary Research Methodology

3. Inflation Accounting: The Concept and the Context

5.1 Introduction 5.2 Methods of Investigation 5.3 Research Design

5.3.1 Nature and Sources of Data 5.3.2 Selection of Sample 5.3.3 The Period of Study

5.4

Tools and Techniques Used

5.4.1 Current Purchasing Power Method 5.4.2 Financial Statement Analysis 5.4.3 Descriptive Statistics

5.4.4 Statistical Analysis of the t-Test 5.4.5 Adjusted Model

5.5 5.6 6. 6.1 6.2 6.3 6.4 6.5 6.6 6.7 6.8 6.9

Presentation of Data Limitations of the Study Impact of Inflation on Corporate Financial Performance Introduction Financial Performance of Sample Companies under HCB Method Financial Performance of Sample Companies under CPP Method Impact of Inflation on GVA and NVA Impact of Inflation on Profit/Loss Sectoral Analysis of Impact of Inflation on Profit/Loss Impact of Inflation on Profit After Tax (PAT) Impact of Inflation on Retained Earnings Summary

7.
7.1 7.2 7.3 7.4 7.5

Impact of Inflation on Major Financial Ratios

Introduction Impact of Inflation on Liquidity Ratios Impact of Inflation on Profitability Ratios Impact of Inflation on Activity Ratios Summary

8.
8.1 8.2 8.3 8.4 8.5 8.6 8.7 8.8 8.9

Impact of Inflation on Stakeholders

Introduction Impact of Inflation on Customers Impact of Inflation on Suppliers/Creditors Impact of Inflation on Employees Impact of Inflation on Financial Institutions Impact of Inflation on Government Impact of Inflation on Shareholders Impact of Inflation on Management Summary

9.
9.1 9.2 9.3 9.4 9.5 9.6 9.7 9.8 9.9 9.10 9.11 9.12 9.13 9.14 10. 10.1 10.2 10.3 10.4

Adjustment of Inflationary Effects

Introduction Application of Model Assumptions for Model The Model Adjustment of Impact of Inflation on Financial Performance Adjustment of Impact of Inflation on Real Operating Income (ROI) Purchasing Power Loss during Inflation Sectoral Analysis of Adjusted Gross and Net Operating Income Sectoral Analysis of Purchasing Power Loss Sectoral Analysis of Real and Reported Income Cross Sectoral Analysis of Purchasing Power Loss Adjusted Gross and Net Operating Income for different Sectors Sectoral Analysis of Purchasing Power Gain/Loss on Net Operating Income Summary Summary of the Findings and Suggestions Introduction Summary of the Theoretical Findings Summary of the Empirical Findings Impact of Inflation on Financial Performance

10.5 10.6 10.7 10.8 10.9 10.10

Impact of Inflation on Major Financial Ratios Impact of Inflation on Stakeholders Adjustment of Impact of Inflation on Financial Efficiency through Model Conclusion Suggestions Scope for Further Research