Inflation accounting

Inflation accounting is a way to adjust a company's financial numbers to reflect changes in the costs of goods and services over time. When the cost of something goes up because of inflation, this means the same product will cost more money, so it isn't fair to compare financial reports from different years because it looks like the company made less money than it did before. Inflation accounting helps to level the playing field and make sure that all the numbers are adjusted for inflation, so we can better compare apples to apples when evaluating a company's finances.