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Unit of account
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===Problems=== Money is rarely perfectly stable in real value which is the fundamental problem with traditional [[historical cost]] accounting which is based on the stable measuring unit assumption. The unit of account in economics suffers from the pitfall of not being stable in real value over time because money is generally not perfectly stable in real value during inflation and deflation. Inflation destroys the assumption that the real value of the unit of account is stable which is the basis of classic [[accountancy]]. In such circumstances, historical values registered in accountancy books become heterogeneous amounts measured in different units. The use of such data under traditional accounting methods without previous correction can lead to confusing β (or even meaningless) β results.<ref>[https://books.google.com/books?id=WXwfMDDYOdkC&dq=inflation+destroys+historical+cost+values&pg=PA259 The Taxation of Income from Business and Capital in Colombia: Fiscal Reform in the Developing World] By Charles E. McLure, John Mutti, Victor Thuronyi, George R. Zodrow, Contributor Charles E. McLure, Published by Duke University Press, 1990, {{ISBN|0-8223-0925-4}}, {{ISBN|978-0-8223-0925-3}}, Page 259 : '''Inflation destroys the assumption that money is stable which is the basis of classic accountancy'''. In such circumstances, historical values registered in accountancy books become heterogeneous amounts measured in different units. The use of such data under traditional accounting methods without previous correction, makes no sense and leads to results that are void of meaning.(Massone, 1981a. p.6)</ref>
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