1. – University Of Mysore, Mysore, India.
2. – University Of Mysore, Mysore, India.
| Received
26-Aug-2013 |
Accepted
- |
Published
26-Aug-2013 |
Abstract
This study aims to examine the differences in profit and earning per share under historical cost accounting and general price
level accounting system and to correlate them with current market price. A simple random sample of four companies was drawn from thirty BSE
SENSEX companies. Financial statements of 2001-02 to 2010-11 were restated under general price level accounting system. The main finding
of the study was that the inflation is recurring feature in India. The figure of profit under historical cost accounting is inflated and illusory. The
degree of relationship of Earning per Share with current market price of shares under historical cost accounting is higher than general price
level accounting. The study suggests to show the inflated adjusted data as supplementary information to make a decision for investors and
policy makers.
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