Time-Value-Of-Money Notation--Let's Be Consistent!

No real purpose is served in the lack of consistency in Time-Value-of-Money (TVM) notation. Students are taught TVM concepts in introductory accounting classes, and the concepts then are integrated throughout the accounting curriculum. Present-value and future-worth problems typically are analyzed through algebraic manipulations of 4 basic formulas, and the mathematical procedure is simple. However, students are faced with a myriad of possible notation combinations, and the concepts alone are difficult enough for them, without trying to decipher the differences in notation. There are adjustments that could be made by instructors in the accounting department to overcome the inconsistencies in textbooks, but an interdisciplinary approach would be more effective. The American Accounting Association (AAA) should ascertain its members' interest in standardization. The particular notation selected is not as important as the attainment of consistency among accounting presentations.