There are a number of special requirements relating to adjusting materials for inflation, as follows:

• You have to calculate the inflation on your materials every six months, but post it only annually.
• You have to follow different procedures for adjusting materials that you have purchased domestically and those that you have imported.
• You adjust imported materials using the exchange rate valid on the date that they were purchased.
• You have to record adjustment postings using a separate G/L account.