Surplus Adjustments in the Iron and Steel Industry.

Abstract The past decade has witnessed a new emphasis on accounting principles and practices. This added emphasis has resulted in a critical re-analysis of our principles, and a revaluation of many of our practices. Of the many factors which contributed to bring about this change, two seem basic: changing price levels and technological changes. The first raises, in a new light, the problems of valuation; the second raises the problem of writing off assets which are physically usable but economically useless. Both of these factors, obviously, operate to qualify profit and loss statements and balance sheets. The differences between surplus changes and profits to surplus, as determined above, are not a result of the profits or deficits carried to surplus. Such changes, which are not accounted for by profits or deficits to surplus, however, do qualify reported profits or losses. These changes might be related to total profits or losses before fixed charges, before cash dividends, or as was done in this study, to profits or losses carried to surplus after fixed charges and cash dividends.