Under SFAS 89 companies are encouraged, but not required, to report their financial statements in US dollars, as well as provide information on the effects if changing prices. One accounting method in line with this standard is constant dollar accounting. Under constant dollar accounting the items on the financial statements are reported in dollars which have the same purchasing power, which is why it is also described as accounting in units of current purchasing power. For example if a machine is bought for a USD 100, and inflation is 5% annually, the cost of the machine would be stated on the financial statement at USD 105 at year end under the constant dollar accounting method. Historical prices are adjusted to take into account the changes in general price levels.