Cross-Checking of Inflation Adjustments
Purpose
When you have calculated the inflation on your
nonmonetary items, you can cross-check the result by calculating the inflation on monetary items. The total balance of the nonmonetary accounts must be the same as that of the monetary accounts, since every nonmonetary transaction is reflected on a monetary account at some stage.Prerequisites
You have classified each G/L account as monetary or nonmonetary, by assigning each an inflation key in which you have selected or deselected Monetary acct (Monetary account).
Process Flow
The amount of inflation calculated must be the same. If not, you trace the source of the error and make the necessary corrections.