Inflation and Accounting.

The article mentions accounting interpretation in the United States and the steel industry's wage policy. The stance of the United Steelworkers of America has been that corporate profits are substantial enough to support higher wages and still allow a fair return on capital. The issue is whether profit figures in accounting reports are accurate or companies are understating their profits with charges against their income accounts such as depreciation. The union presented the contention that--in a single year--steel companies have concealed as much as $210 million in profits. Topics include five reasons for basing depreciation on first cost, the distinction between accounting income and economic or real income, and consideration of the costs of replacing inventory or equipment as profits.