Özet:

In Economies of hyperinflation, information presented in financial reports that are based on historical cost accounting is far from providing the true and reliable information about the financial and operational results of firms. In order to provide a realistic perspective on firms’ operational outcomes, several necessary adjustments should be applied as eliminating the negative impacts of price changes on firms and arranging financial reports in accordance with the price movements. In this study, the effects of inflation accounting practice on financial reports of firms during the period of 2003-2004 are investigated. For the purpose, the empirical analysis is conducted on two groups of firms. One includes the firms that are quoted on Istanbul Stock Exchange that are also required to adjust their reports in accordance with the rule XI-20 of the Capital Markets Board (CMB). The other captures the Small and Medium Size Enterprises (SMEs) that prepare inflationadjusted reports as required by the law 5024. The main purpose of the study constitutes examining the effects of inflation adjustments made in 2003-2004 financial reports and, in this regard, establishing a portrait in general sense

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