Capital Maintenance in Units of Constant Purchasing Power™ http://blogs.fin24.com/constantitempurchasingpoweraccounting Financial capital maintenance in units of constant purchasing power as authorized in IFRS Wed, 22 May 2013 17:00:53 +0000 en-US hourly 1 http://wordpress.org/?v=3.4.2 Standard setting institutions (the IASB) are highly politicised http://blogs.fin24.com/constantitempurchasingpoweraccounting/2013/05/22/standard-setting-institutions-the-iasb-are-high-politicised/ http://blogs.fin24.com/constantitempurchasingpoweraccounting/2013/05/22/standard-setting-institutions-the-iasb-are-high-politicised/#comments Wed, 22 May 2013 14:35:34 +0000 constantitempurchasingpoweraccounting http://blogs.fin24.com/constantitempurchasingpoweraccounting/?p=778 Standard setting institutions (the IASB) are highly politicised

THE PROBLEM WITH ACCOUNTING RESEARCH 
Accounting academics remain disconnected from standards setting, which weakens accounting frameworks. Problem solving in accounting has, as a result, mainly been left to standard-setting institutions, not universities – in environments that are typically highly politicised and in which academic freedom is conspicuous only for its absence.
Prof Mark Bunting
Rhodes University
]]> http://blogs.fin24.com/constantitempurchasingpoweraccounting/2013/05/22/standard-setting-institutions-the-iasb-are-high-politicised/feed/ 0 IAS 29 Financial Reporting in Hyperinflationary Economies – Reporting according to IFRSs after a period of chronic hyperinflation. http://blogs.fin24.com/constantitempurchasingpoweraccounting/2013/05/21/ias-29-financial-reporting-in-hyperinflationary-economies-reporting-according-to-ifrss-after-a-period-of-chronic-hyperinflation/ http://blogs.fin24.com/constantitempurchasingpoweraccounting/2013/05/21/ias-29-financial-reporting-in-hyperinflationary-economies-reporting-according-to-ifrss-after-a-period-of-chronic-hyperinflation/#comments Tue, 21 May 2013 17:18:41 +0000 constantitempurchasingpoweraccounting http://blogs.fin24.com/constantitempurchasingpoweraccounting/?p=775 IAS 29 Financial Reporting in Hyperinflationary Economies – Reporting according to IFRSs after a period of chronic hyperinflation.

IFRS Foundation
]]> http://blogs.fin24.com/constantitempurchasingpoweraccounting/2013/05/21/ias-29-financial-reporting-in-hyperinflationary-economies-reporting-according-to-ifrss-after-a-period-of-chronic-hyperinflation/feed/ 0 The Applicability of IAS 29 to financial statements prepared under the concept of financial capital maintenance in constant purchasing power units. http://blogs.fin24.com/constantitempurchasingpoweraccounting/2013/05/21/the-applicability-of-ias-29-to-financial-statements-prepared-under-the-concept-of-financial-capital-maintenance-in-constant-purchasing-power-units/ http://blogs.fin24.com/constantitempurchasingpoweraccounting/2013/05/21/the-applicability-of-ias-29-to-financial-statements-prepared-under-the-concept-of-financial-capital-maintenance-in-constant-purchasing-power-units/#comments Tue, 21 May 2013 17:09:07 +0000 constantitempurchasingpoweraccounting http://blogs.fin24.com/constantitempurchasingpoweraccounting/?p=773 The Applicability of IAS 29 to financial statements prepared under the concept of financial capital maintenance in constant purchasing power units.

The above IFRS Staff Paper contains 16 mistakes which I pointed out to the IASB over here.
Nicolaas Smith
Copyright (c) 2005-2013 Nicolaas J Smith. All rights reserved. No reproduction without permission.

]]> http://blogs.fin24.com/constantitempurchasingpoweraccounting/2013/05/21/the-applicability-of-ias-29-to-financial-statements-prepared-under-the-concept-of-financial-capital-maintenance-in-constant-purchasing-power-units/feed/ 0 What is the Significance of Generally Accepted Principles of Accounting? http://blogs.fin24.com/constantitempurchasingpoweraccounting/2013/05/21/what-is-the-significance-of-generally-accepted-principles-of-accounting/ http://blogs.fin24.com/constantitempurchasingpoweraccounting/2013/05/21/what-is-the-significance-of-generally-accepted-principles-of-accounting/#comments Tue, 21 May 2013 14:39:17 +0000 constantitempurchasingpoweraccounting http://blogs.fin24.com/constantitempurchasingpoweraccounting/?p=771 What is the Significance of Generally Accepted Principles of Accounting?

Infoxin
]]> http://blogs.fin24.com/constantitempurchasingpoweraccounting/2013/05/21/what-is-the-significance-of-generally-accepted-principles-of-accounting/feed/ 0 Application of IAS 29 http://blogs.fin24.com/constantitempurchasingpoweraccounting/2013/05/21/application-of-ias-29/ http://blogs.fin24.com/constantitempurchasingpoweraccounting/2013/05/21/application-of-ias-29/#comments Tue, 21 May 2013 14:13:43 +0000 constantitempurchasingpoweraccounting http://blogs.fin24.com/constantitempurchasingpoweraccounting/?p=768 Application of IAS 29

World Bank
]]> http://blogs.fin24.com/constantitempurchasingpoweraccounting/2013/05/21/application-of-ias-29/feed/ 0 Daily CPI one step better than inflation targeting http://blogs.fin24.com/constantitempurchasingpoweraccounting/2013/05/16/daily-cpi-one-step-better-than-inflation-targeting/ http://blogs.fin24.com/constantitempurchasingpoweraccounting/2013/05/16/daily-cpi-one-step-better-than-inflation-targeting/#comments Thu, 16 May 2013 11:21:11 +0000 constantitempurchasingpoweraccounting http://blogs.fin24.com/constantitempurchasingpoweraccounting/?p=759 Daily CPI one step better than inflation targeting

There are no surprises with the Daily CPI. The Daily CPI is always known in advance. The Daily CPI is thus one step better than inflation targeting: it is daily inflation known in advance.
Here are the links to the future daily inflation in the
US,
UK – Daily Reference RPI: Click on Index Ratio data for indexed linked gilts,
Chile (Unidad de Fomento or UF),
Colombia and
Iceland.
Nicolaas Smith
Copyright (c) 2005-2013 Nicolaas J Smith. All rights reserved. No reproduction without permission.
]]> http://blogs.fin24.com/constantitempurchasingpoweraccounting/2013/05/16/daily-cpi-one-step-better-than-inflation-targeting/feed/ 0 CMUCPP used (not implemented) in low inflationary countries too http://blogs.fin24.com/constantitempurchasingpoweraccounting/2013/05/16/cmucpp-used-not-implemented-in-low-inflationary-countries-too/ http://blogs.fin24.com/constantitempurchasingpoweraccounting/2013/05/16/cmucpp-used-not-implemented-in-low-inflationary-countries-too/#comments Thu, 16 May 2013 10:35:40 +0000 constantitempurchasingpoweraccounting http://blogs.fin24.com/constantitempurchasingpoweraccounting/?p=754 CMUCPP used (not implemented) in low inflationary countries too

CMUCPP was implemented in a number of countries, including Turkey, Russia and Zimbabwe during hyperinflation in terms of IAS 29 since 1990, the year of first implementation of the standard (IAS 29). CMUCPP is currently (2013) being implemented during hyperinflation in Venezuela and Belarus in terms of IAS 29. CMUCPP has been used since 1990  in terms of IAS 29 and is currently being used in terms of IAS 29 by multi-nationals with subsidiaries in hyperinflationary countries, in low inflationary countries too when they consolidated/consolidate the financial statements of these subsidiaries in their consolidated financial statements.
  Nicolaas Smith Copyright
(c) 2005-2013 Nicolaas J Smith. All rights reserved. No reproduction without permission.
]]> http://blogs.fin24.com/constantitempurchasingpoweraccounting/2013/05/16/cmucpp-used-not-implemented-in-low-inflationary-countries-too/feed/ 0 Capital Maintenance in Units of Constant Purchasing Power is the only accounting model specifically prescribed in IFRS http://blogs.fin24.com/constantitempurchasingpoweraccounting/2013/05/13/capital-maintenance-in-units-of-constant-purchasing-power-is-the-only-accounting-model-specifically-prescribed-in-ifrs/ http://blogs.fin24.com/constantitempurchasingpoweraccounting/2013/05/13/capital-maintenance-in-units-of-constant-purchasing-power-is-the-only-accounting-model-specifically-prescribed-in-ifrs/#comments Mon, 13 May 2013 18:03:21 +0000 constantitempurchasingpoweraccounting http://blogs.fin24.com/constantitempurchasingpoweraccounting/?p=752 Capital Maintenance in Units of Constant Purchasing Power is the only accounting model specifically prescribed in IFRS

Capital Maintenance in Units of Constant Purchasing Power is implied during hyperinflation in terms of IAS 29. Capital Maintenance in Units of Constant Purchasing Power, i.e., restatement required in IAS 29, is the only accounting model specifically prescribed in IFRS.
 ‘At the present time, it is not the intention of the Board to prescribe a particular model other than in exceptional circumstances, such as for those entities reporting in the currency of a hyperinflationary economy.’
Conceptual Framework (2010), Par. 4.65

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

]]> http://blogs.fin24.com/constantitempurchasingpoweraccounting/2013/05/13/capital-maintenance-in-units-of-constant-purchasing-power-is-the-only-accounting-model-specifically-prescribed-in-ifrs/feed/ 0 Definition of Capital Maintenance in Units of Constant Purchasing Power http://blogs.fin24.com/constantitempurchasingpoweraccounting/2013/05/11/definition-of-capital-maintenance-in-units-of-constant-purchasing-power-2/ http://blogs.fin24.com/constantitempurchasingpoweraccounting/2013/05/11/definition-of-capital-maintenance-in-units-of-constant-purchasing-power-2/#comments Sat, 11 May 2013 14:22:30 +0000 constantitempurchasingpoweraccounting http://blogs.fin24.com/constantitempurchasingpoweraccounting/?p=748 Definition of Capital Maintenance in Units of Constant Purchasing Power

Capital Maintenance in Units of Constant Purchasing Power (CMUCPP) is the maintenance of the constant purchasing power of capital – capital being equal to the real value of net assets – for an indefinite period of time at all levels of inflation and deflation in entities that at least break even in real value – ceteris paribus – in units of constant purchasing power in terms of an index that recognizes all changes in the general price level.

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

]]> http://blogs.fin24.com/constantitempurchasingpoweraccounting/2013/05/11/definition-of-capital-maintenance-in-units-of-constant-purchasing-power-2/feed/ 0 Different forms of Capital Maintenance in Units of Constant Purchasing Power http://blogs.fin24.com/constantitempurchasingpoweraccounting/2013/05/11/different-forms-of-capital-maintenance-in-units-of-constant-purchasing-power/ http://blogs.fin24.com/constantitempurchasingpoweraccounting/2013/05/11/different-forms-of-capital-maintenance-in-units-of-constant-purchasing-power/#comments Sat, 11 May 2013 14:18:01 +0000 constantitempurchasingpoweraccounting http://blogs.fin24.com/constantitempurchasingpoweraccounting/?p=746 Different forms of Capital Maintenance in Units of Constant Purchasing Power

The following are all forms of Capital Maintenance in Units of Purchasing Power:
1. Indexation in countries with high or hyperinflation
2. Monetary correction in countries with high or hyperinflation.
3. Price-level accounting
4. Price-level restatement by, for example, the Central Bank of Chile.
5. Restatement of Historical Cost or Current Cost financial statements in terms of the measuring unit current at the balance sheet date during hyperinflation (IAS 29).
None of the above would result in ideal Capital Maintenance in Units of Constant Purchasing Power with 100 percent of the constant purchasing power of capital maintained if the following condition were not met:
1. Implementation of a daily index (e.g., the Daily CPI) which generally recognizes all changes in the general price level.
Nicolaas Smith
Copyright (c) 2005-2013 Nicolaas J Smith. All rights reserved. No reproduction without permission.
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