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Friday, 4 October 2013

Financial reporting and financial graphs are generally misleading

Financial reporting and financial graphs are generally misleading because of

1.The use of Historical Cost Accounting, i.e., the use of the stable measuring unit assumption during inflation and deflation:

(a) not inflation-indexing monetary items in terms of a Daily Index and

(b) not measuring constant real value non-monetary items in units of constant purchasing power in terms of a Daily Index.

2. Natural scale graphs, i.e., not presenting graphs in semi-log scale.

This may take another 200 years to correct.

Nicolaas Smith

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