Why are most financial statements reported in nominal dollars?
|
  |
|
|
| Author |
Message |
che
Apprentice
Joined: 09 Jun 2004
Posts: 6
|
 Posted: 08/03/08 - 09:57 Post subject: |
 |
|
| I’m trying to learn the difference between nominal and real dollars. I have a vague idea about those currencies but I have noticed something. Namely, most financial statements are expressed in nominal dollars. Why is that so? Is this currency used for specialized banking statements or something? When are real dollars used? At certain moments it seems to me that there is no difference between those two. |
|
|
Back to top
|
|
|
|
 |
merle
Apprentice
Joined: 24 Dec 2007
Posts: 2
|
| Posted: 09/01/08 - 21:47 Post subject: |
|
|
| Hm, that is strange because I think that even people who have no contacts with economy whatsoever can tell the difference between those tow concepts. Nominal dollars are, as you know, that currency which is established without taking inflation into consideration. This means that regular people can’t expect nominal dollars to express their purchasing power. I suppose that it is less complicated to issue a financial statement in nominal dollars and later apply inflation rates for that certain period. I also think that it is not too complicated to convert nominal dollar into real dollars when necessary. For ordinary people nominal values cannot express anything as they don’t show what the real value of the salary is. |
|
|
Back to top
|
|
|
|
|
|
| |
All times are GMT
|
| Page 1 of 1 |
Related topics: | |
|
|
