Define: Working-Capital Adjustment

UK Accounting Glossary

Definition: Working-Capital Adjustment

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What is the dictionary definition of Working-Capital Adjustment?

Dictionary Definition

In current-cost accounting a working-capital adjustment (also known as monetary working-capital adjustment) is an adjustment made to the working capital of a business.

Bank balances and overdrafts may fluctuate with the volume of stock held, the debtors and the creditors.

If the bank balances and overdrafts arise from such fluctuations, they should also be included in the monetary working capital, together with any cash required to support the daily operations of the business.

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