The gearing adjustment in inflation accounting: The financing sequence assumption

Artikel

The application of a gearing adjustment in inflation accounting has always resulted in the problem of determining a financing sequence. A decision has to be taken whether certain categories of assets are financed with equity and/or loan capital. Financial theory of the last few decades quite convincingly revealed that there are no logical grounds for relating certain assets to certain liabilities and/or equity. This proportional financing assumption is discussed and illustrated in the article for the so-called Van der Schroeff-system of income demermination in order to point out the sensitivity and financial consequences of this assumption for financial decision making. The assumption about the financing sequence does have a definite influence on the gearing adjustment. Further influences are on the income statement and the message given to shareholders and the investment public; the composition of the asset structure and consequently the risk composition of the assets; the composition of the financing structure and consequently the financial risk as portrayed by the balance sheet; and the marginal financing ratios needed to maintain the original gearing ratio.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Journal: South African Journal of Business Management ; ISSN: 2078-5976 ; Volume: 20 ; Year: 1989 ; Issue: 3 ; Pages: 163-167 ; Cape Town: African Online Scientific Information Systems (AOSIS)

Klassifikation und Themen

• Klassifikation: Management

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Van Hoepen, M. A. ; Lambrechts, I. J. ; Mostert, F. J.
• Ereignis: Veröffentlichung
• (wer): African Online Scientific Information Systems (AOSIS)
• (wo): Cape Town
• (wann): 1989

Weitere Informationen

• DOI: doi:10.4102/sajbm.v20i3.956
• Handle: http://hdl.handle.net/10419/218032
• Letzte Aktualisierung: 10.03.2025, 11:42 MEZ