The correct answer is: C. Current Cost Accounting Method.
The Sandilands Committee was a committee set up by the UK government in 1974 to investigate the implications of inflation for financial reporting. The Committee’s report, “The Inflation Accounting Committee: Report of the Inflation Accounting Committee to the Department of Trade and Industry and the Treasury”, was published in 1975.
The Committee recommended that companies should adopt a current cost accounting (CCA) system for financial reporting. CCA is a system of accounting that measures the current cost of assets and liabilities, and the current cost of goods sold and services provided. This information is then used to calculate a company’s current cost profit and loss account and balance sheet.
The Committee’s recommendations were not implemented in full, but CCA has been adopted by some companies in the UK.
The other options are incorrect because:
- A. General Price Level Method is a system of accounting that measures the historical cost of assets and liabilities, adjusted for changes in the general price level.
- B. Specific Price Level Method is a system of accounting that measures the historical cost of assets and liabilities, adjusted for changes in the specific price level of the assets and liabilities.
- D. Generally Accepted Accounting Principles (GAAP) is a set of accounting standards that are used in the United States.