IASB clueless about CMUCPP
January 25, 2013 in Uncategorized
The IASB does not understand the difference between
1. Financial statements measured in constant purchasing power units (Agenda Paper 20)
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 removed the title of Agenda Paper 20 which hides (in order to hide?) the fact that they had the two different descriptions for the same item: the one in the Title of Agenda Paper 20 on the Schedule for the 22 – 23 January 2013 IFRS Interpretations Committee meeting and the other in the actual Paper Topic in the actual Agenda Paper 20 pdf file.)
The IASB does not understand that financial statements prepared under the CAPITAL MAINTENANCE CONCEPT of finacial capital maintenance in constant purchasing power units is very, very, very different from year end financial statements simply measured(restated after year-end) in constant purchasing power units. The IASB is as blind as a bat about capital maintenance: absolutely clueless. However, I have come to realise that this is simply a reflection of the very generally view in most (not all – see CPA Australia and the Institute of Chartered Accountants Australia´s view that
IASB has “a lack of understanding about the fundamental role a capital maintenance concept has within the accounting framework”)
of the accounting profession about the financial capital maintenance concept.
As can be seen from the links, the IASB uses the two different descriptions of two different concepts for (the same) Agenda Paper 20.
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