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- musicgold1
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Deciding if a price increase is real or nominal
Hi,The following statement is from a paper. I understand the difference between real and nonimal price increases. I am trying to understand how one decides if an asset's price increase over the past year is real or nominal (due to inflation alone). If the inventory of a company appreciates in real terms (e.g. oil and gold in recent years) , a reasonable argument can be made that real profits should be recorded. Thanks,MG.
Last edited by musicgold1 on June 2nd, 2010, 10:00 pm, edited 1 time in total.
Deciding if a price increase is real or nominal
Inflation adjust increases?
Deciding if a price increase is real or nominal
QuoteOriginally posted by: musicgold1Hi,The following statement is from a paper. I understand the difference between real and nonimal price increases. I am trying to understand how one decides if an asset's price increase over the past year is real or nominal (due to inflation alone). If the inventory of a company appreciates in real terms (e.g. oil and gold in recent years) , a reasonable argument can be made that real profits should be recorded. Thanks,MG.Google for inflation accounting