Current Cost Accounting

In July 1973 the UK government announced that a special committee of enquiry was to be set up “to consider whether, and if so how, company accounts should allow for changes in costs and prices, having regard to established accounting conventions based on historic costs, the proposal for current general purchasing power accounting put forward by the Accounting Standards Steering Committee, and other possible accounting methods of allowing for price changes, and to make recommendations”. The twelve‐person committee under Francis Sandilands produced its 364‐page report (Cmnd.6225) in September 1975. The committee recommended that a system of current cost accounting should be adopted for listed companies, large unlisted companies, and nationalised industries for accounting periods beginning after 24 December 1977. It also recommended that a special steering group should be set up to oversee the introduction of current cost accounting. In November 1975 the government gave its qualified approval to the Sandilands recommendations, and agreed to set up a special steering group under the chairmanship of Mr. Douglas Morpeth. It is hoped that this group will produce a statement on this subject in the latter part of 1976.