Stable world economy entirely in the hands of the IASB and the accounting profession

December 3, 2012 in Uncategorized

Stable world economy entirely in the hands of the IASB and the accounting profession

Daily inflation-indexing of all monetary items is a direct requirement of capital maintenance in units of constant purchasing power; i.e., it is required by IFRS as authorized by the IASB.
The stable measuring unit assumption is never implemented under capital maintenance in units of constant purchasing power as authorized in IFRS twenty three years ago. The entire money supply has, consequently, to be inflation-indexed on a daily basis. This eliminates the entire monetary effect (eroding or increasing of the real value of monetary items over time) of low inflation, high inflation, hyperinflation and deflation from the entire monetary economy under complete co-ordination.
This requires all banks – commercial and central banks – to inflation-adjust all monetary items on a daily basis in countries implementing IFRS.
The Daily Index Plan is thus entirely implemented in terms of IFRS: no Central Bank intervention is required.
Operating the world economy in constant monetary and constant real value non-monetary items (a stable world economy) is thus entirely the responsibility of the IASB: i.e., entirely in the power of the world´s accountants
.
The IASB has, in fact, authorized capital maintenance in units of constant purchasing power as an option to traditional HCA twenty three years ago (in 1989).
However, almost no-one understands it, with the result that although it was, in principle, implemented during 30 years of very high and hyperinflation in Brazil and during 45 years in Chile, these two countries unintentionally and unknowingly went back to HCA.
The IASB is currently (2012) working on (submitted to research) a draft IFRS `X´ CAPITAL MAINTENANCE IN UNITS OF CONSTANT PURCHASING, originally submitted  to the IASB by the Argentinean Accounting Federation in 2010 in conjunction with the accounting authorities in Brazil, Mexico and Chile, – and then amended by me to its current title and form –  that will require  (not optional) capital maintenance in units of constant purchasing power in terms of a Daily Index in all countries implementing IFRS with annual inflation equal to or greater than 10 percent or cumulative annual inflation equal to or greater than 26 percent over three years.
This will mean the beginning of the end of HCA in the world economy after a reign of thousands of years: the only paradigm the world has ever known since the implementation of double entry accounting.
The IASB always specifically encourages early implementation of a proposed IFRS in the process of being authorized. The early implementation of a proposed IFRS is part of the very thorough due process – very responsibly, correctly and essentially – required prior to authorization by the IASB.
You are thus very welcome and encouraged by the IASB to implement capital maintenance in units of constant purchasing power in terms of a Daily Index in your company, preferably in your entire country, prior to its actual authorization by the IASB in years to come.
Free assistance is available  to under-developed, developing and emerging market economies from the newly formed (on 30 November 2012 in Lisboa, Portugal) Non-Governmental Organization SUSTAINABLE DEVELOPMENT WITHOUT BORDERS, provided you (or a private foundation, NGO or sustainable economic development organization related to your country) provide the finance to SDWB to visit your country to advise your accounting authorities in this matter.

Nicolaas Smith
Copyright (c) 2005-2012 Nicolaas J Smith. All rights reserved. No reproduction without permission.

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