Inflation implies a decline in the purchasing power of money. This may distort the information given by accounts that use money as their unit of measurement. Changes in prices of particular commodities may not move exactly in line with one another. Thus, there is a choice between adjusting items in the accounts for specific price changes or for changes in the general price level. It is therefore better to use the broader term, price change accounting, rather than the narrower term, inflation accounting, the latter implying only general price level adjustment.

The accountant's traditional method of accounting, historical cost accounting (HCA), makes no allowances for general inflation or for changes in the prices of assets that have not been sold. Current purchasing power accounting (CPPA) is a means of adjusting HCA accounts for inflation by using general price level indices. The idea of general index-based CPPA systems owes its origins particularly to the hyperinflation in Germany in the 1920s. The English-speaking world also advocated CPPA as a response to the inflation of the early 1970s, but it was adopted only in Latin America, where its practice continues as a response to hyperinflation.

Real terms accounting (RTA) is a means of combining revaluations of specific assets at current prices (reflecting specific price changes) with general index adjustments (reflecting the impact of inflation). Current value accounting (CVA) revalues assets at current prices, but makes no general index adjustment. It is therefore a method of price change accounting but not of inflation accounting (since it does not have regard to changes in the general price level).

Replacement cost accounting (RCA) revalues assets at current replacement cost (a form of current valuation) but also uses a replacement cost index to adjust the owners' capital of the business in calculating whether a profit has been made. This means that appreciation in the value of the firm's operating assets is not recognized as a gain (as it would be in CVA), because the firm needs its assets to maintain its operations and therefore is made no better off if their market value increases, since it has no intention to sell them. RCA is not strictly an inflation accounting method, but a system of price change accounting.

The choice between methods of price change accounting is a difficult one. In particular, there is a trade-off between relevance and reliability. Current values, although unreliable, are often regarded as relevant to economic decisions and assessments, whereas historical costs are more reliable (having a basis in verifiable transactions) but are less useful as indicators of the economic condition of a business in times of rapid price changes. The choice of accounting method may also benefit one party with an interest in the firm at the expense of another. General price level adjustments are particularly useful in aiding comparisons across series of years, although it is important that the adjustments be applied consistently. The management accounts of companies, which are used internally for decision making and control, may also be affected by price changes. Appropriate adjustments need to be made in order to avoid decisions being based on misleading information. The possibility of taxes or tax reliefs based on price change adjustments has played an important role in determining the adoption in practice of such adjustments.