What is net inflation rate in SAP AC - Accounting - General?

SAP Term: net inflation rate

• Component: AC

• Component Name: Accounting - General

• Description: The net increase or decrease in prices over a specifc period, expressed as a percentage of the prices at the start of the period.

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• Key Concepts: 
  Net inflation rate is a term used in SAP Accounting - General Ledger Accounting. It is the difference between the inflation rate of a country and the rate of return on investments. This rate is used to calculate the net present value of future cash flows. 
  
  How to use it: 
  The net inflation rate is used to calculate the net present value of future cash flows. This calculation is done by subtracting the inflation rate from the rate of return on investments. The result is then used to adjust the future cash flows to their present value. 
  
  Tips & Tricks: 
  When calculating the net present value of future cash flows, it is important to use an accurate inflation rate and rate of return on investments. This will ensure that the calculation is accurate and that the net present value reflects the true value of the future cash flows. 
  
  Related Information: 
  The net inflation rate can also be used to calculate the real rate of return on investments. This calculation is done by subtracting the inflation rate from the nominal rate of return on investments. The result is then used to adjust the nominal rate of return to its real value.