20 • 19
Inflation Corrected Amounts
Historical Amounts
Assuming a 25% Rate of Inflation
Balance Sheet
1/1/X5
12/31/X5
12/31/X5
Current assets
R$ 150
R$ 450
Current assets
R$
450
Permanent assets
1,600
1,600
Permanent assets
2,000
a
Provision for Depreciation
(200)
(200)
Provision for
Depreciation
(300)
Monetary correction
(75)
b
Correction of historical Charge to P&L
(25)
c
(400)
________
________
_____
_________
Total
R$ 1,550
R$ 1,750
Total
R$ 2,050
________
________
_________
________
________
_________
Current liabilities
R$
50
R$
50
Current liabilities
R$
50
Long-term debt
400
400
Long-term debt
400
Equity:
Equity
Capital
800
800
Capital
800
Capital reserve
200
d
Reserves
300
300
Reserves
375
e
Profit of period
200
Profit of period
225
________
________
_________
Total
R$ 1,550
R$ 1,750
Total
R$ 2,050
________
________
_________
________
________
_________
Exhibit 20.10.
Brazilian Example of Inflation Adjustments.
(continued
)