What question did this study set out to answer?

This paper aims to enhance students' understanding of funds statements and the impact of changing prices by integrating these topics.

June 15, 2026

Teaching the "Funds" Statement Under Alternative Valuation Methods.

Key Points

This paper aims to enhance students' understanding of funds statements and the impact of changing prices by integrating these topics.
Introduced an integration approach for teaching the funds statement with regard to changing prices.
Provided suggestions for effective teaching methods for financial accounting concepts.
Identified unresolved issues in funds statement presentation outside of historical cost accounting.
Demonstrated that integrating funds statements with price change accounting can improve comprehension.
Highlighted critical issues in the presentation of funds statements that affect learning outcomes.
Indicated potential improvements in educational approaches for teaching intermediate financial accounting.

Abstract

Abstract Students generally study both (1) the statement of changes in financial position (SCFP) or "funds" statement and (2) accounting for changing prices in some detail in the typical intermediate financial accounting course. Unfortunately, the SCFP normally is presented only in the context of historical cost accounting and the effects of changing prices generally are illustrated only as they relate to the income statement and balance sheet. We believe that students' understanding of these two subjects can be enhanced if they are integrated. This paper provides such an integration along with some suggestions for effective teaching of this material. It also identifies some unresolved issues in funds statement presentation which become even more critical when one departs from the conventional historical cost/nominal dollar accounting model.

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