Capital Maintenance in Units of Constant Purchasing Power™

The objective of general purpose financial reporting / accounting is to legalise measurement bases binding on both parties in transactions / exchanges, e.g., a sale (contract), that results in automatic capital maintenance in units of constant purchasing power, i.e., that results in automatically maintaining the constant purchasing power of capital constant at all levels of inflation and deflation, including during hyperinflation, in all entities that at least break even in real value – ceteris paribus – for an indefinite period of time.

This objective is automatically achieved with IFRS-authorised Capital Maintenance in Units of Constant Purchasing Power in terms of a Daily Index.

Nicolaas Smith

Do not ask the IASB for guidance regarding IFRS-authorised CMCUPP. They do not understand it. Contact me for guidance at realvalueaccounting[at]yahoo.com.

Copyright (c) 2005-2013 Nicolaas J Smith. All rights reserved. No reproduction without permission.

Nicolaas Smith Copyright (c) 2005-2013 Nicolaas J Smith. All rights reserved. No reproduction without permission.

Nicolaas Smith Copyright (c) 2005-2013 Nicolaas J Smith. All rights reserved. No reproduction without permission.

  According to Michael Stewart, Director of Implementation Activities at the IASB:

‘I made a comment that until such time as the IASB decides that IAS 29 should be either amended or withdrawn, it is the appropriate standard to apply when the functional currency of an entity is the currency of a hyperinflationary economy (as defined in that standard). I think this is very different from the statement that you have attributed to me that “the IASB is satisfied with the implementation of IAS 29 during 8 years in Zimbabwe’s hyperinflationary economy”. The IASB has not conducted a review of the implementation of IAS 29 during 8 years in Zimbabwe’s hyperinflationary economy so it is not possible for the IASB to express such a view without having undertaken such a review.’

Personal communication, 2013

Most accountants in the world, except the members of the IASB according to Michael Stewart as well as himself, can express the view that the implementation of IAS 29 had no positive effect in Zimbabwe

.
Only the IASB and Michael Stewart need a review.

Most other interested parties can recognise what is obvious in history.

Nicolaas Smith

Opinions on this blog expressed by me are my personal opinions.
Copyright (c) 2005-2013 Nicolaas J Smith. All rights reserved. No reproduction without permission.

The IASB does not understand the difference between

1. financial statements measured in constant purchasing power unit (Agenda Paper 20)

and

2. financial statements prepared under the concept of financial capital maintenance in constant purchasing power units. (Paper Topic)

The proofs are in the links.

The IASB does not understand that financial statements prepared under the concept of finacial capital maintenance in constant purchasing power units is very, very, very different from financial statements measured in constant purchasing power units.

Agenda Paper 20 contains 16 errors / problems / disagreements with the submitter.

As can be seen from the links, the IASB uses the two different descriptions of two different concepts for Agenda Paper 20.

Nicolaas Smith

Opinions on this blog expressed by me are my personal opinions.
Copyright (c) 2005-2013 Nicolaas J Smith. All rights reserved. No reproduction without permission.

Nicolaas Smith
Opinions on this blog expressed by me are my personal opinions.
Copyright (c) 2005-2013 Nicolaas J Smith. All rights reserved. No reproduction without permission.

Nicolaas Smith Opinions on this blog expressed by me are my personal opinions. Copyright (c) 2005-2013 Nicolaas J Smith. All rights reserved. No reproduction without permission.

Iran currency falls further on concers over Central Bank.

New York Times

CNN