Evaluation of application problems that emerged from the transition process to inflation accounting: A theoretical and practical study

Higher inflation that has been going on since 1970s prevented the real situationshowed in financial schedule that prepared as to historical values. For that reason applicationof inflation accounting became an expectation for business world. Inflation correction thatwas given by 5024 numbered law was not enough to meet the expectations.In this study we first introduced the effects of inflation on accounting and business anddescribed methods that prevent the effects of inflation. Than we described the applicationproblems of law, chosen index, application conditions, monetary and non monetary resourcesand wealth, and items of revenue schedule. And in the last section questionnaire form whichwas applied to 118 firms that were continued their activities in cites of Elazig, Diyarbakir,Malatya, Adıyaman, and Şanlıurfa and results of the questionnaire represented.When we evaluate the results of application we can see problems that emerged fromapplication as; revenue and loss are kept out of transaction, correction process can only beapplied to non monetary items and monetary items excluded from correction process,complicated applications, applications that were in contradiction with internationalapplications , conditions of 10% annual inflation and 100% third year inflation requiredtogether, there were contradictions between the balance sheet after the corrections made andbalance sheet arranged according to Turkish Trade Law.Inflation accounting law is far away from the expectations of business enterprises andit was late to apply it. If it was gotten out accordance with international standards it wouldrealize the expectations.