The Price-Level Restatement and Its Dual Interpretation.

Abstract Official pronouncements on financial statements restated for general price level (or simply, price-level statements) repeatedly have emphasized that price-level statements be treated as being entirely different from conventional financial statements. Financial Accounting Standards Board Exposure Draft on price-level statements also follows the same approach, emphasizing that conventional statements are stated in units of money while price-level statements are stated in units of general purchasing power. Such an attempt to treat price-level statements as being totally different in units of measurement may be desirable once a frame of reference is established firmly in the minds of users of financial statements. At least until such time, it seems to make sense to provide a bridge between conventional statements and price-level statements to facilitate acceptance of the new statements. The article analyzes and evaluates price-level statements from the viewpoint that their unit of measurement is comparable to that of conventional statements. The difference in figures arises because different accounting principles are applied to them.