Looks of the Books of Nigerian Firms : Fairness of Inflation-Adjusted Accounting

The limitations of historical cost accounting (HCA), particularly in times of rising prices, logically justify the attractions of inflation-adjusted accounting (IAA). This study examines the looks of the books of selected Nigerian firms, through the conceptual spectacles of HCA and IAA. The corporate financial values considered are gross profit, profit after tax, total assets, return on assets, return on equity, and net worth. Analysis of the firms' financial statements after converting HCA-based financial data to the IAA equivalents indicates fairer looks in favour of the IAA system. Specifically, more competitive corporate fairness is evidenced by the high difference in HCA-based and IAA-based looks of gross profit, profit after tax, total assets, return on assets, return on equity, and net worth. Given that HCA and IAA systems are not mutually exclusive, compliance expediency professionally elicits the retention of HCA as traditional basis for meaningful adjustment and adoption of IAA in redefining and representing the looks of the books. The evolving fairer new looks of the books make for more efficient corporate investment decisions, strategic sustainability and global compatibility in the comity of forward moving firms