Constant Currency Accounting

Under constant currency accounting, the effect of inflation is the major factor taken into consideration for asset revaluation. Inflation trends move upward, though it can vary widely from country to country: from virtually insignificant, single-digit rises to three- and even four-digit rates. Comparing costs from one year to the next in a hyperinflationary economy is meaningless unless the currency fluctuation is factored in. In some countries, you are required to adjust costs as the value of the currency changes. Even without a government mandate, you might want to revalue assets for reporting purposes.