By the Numbers

Accounting for inflation

The spring flood of corporate annual reports is now flowing into mailboxes of America's 29.8 million shareholders. Along with the pretty pictures, fancy graphs and carefully chiseled words, many contain the most significant change in accounting procedures in decades. They reflect the effects of inflation on a company's financial performance.

In nearly all cases the new bottom line proves to be lower than almost anyone had imagined. Bethlehem Steel, for example, shows a net income under conventional accounting of $121 million for 1980. But with inflation accounting, that profit turns into a loss of either $176 mil lion or $257...

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