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Friday, 13 January 2012

Attributes of CIPPA - Part 3 of 3: Constant items measured in units of constant purchasing power daily

Attributes of CIPPA - Part 3 of 3: Constant items measured in units of constant purchasing power daily
[Attributes of CIPPA - Part 1 of 3: Monetary items inflation-adjusted daily]

[Attributes of CIPPA - Part 2 of 3: Variable items updated daily]

Constant items measured in units of constant purchasing power daily

Constant items are always and everywhere measured in units of constant purchasing power in terms of a DCPI or monetized daily indexed unit of account during low and high inflation and deflation and in terms of a daily hard currency parallel rate of daily index rate during hyperinflation under CIPPA. This would eliminate the entire cost of the stable measuring unit assumption (mistakenly thought to be the same as the cost of inflation) – currently hundreds of billions of US Dollars per annum – from the constant item economy only in the unlikely case of complete co-ordination right from the start of changing over to financial capital maintenance in units of constant purchasing power in terms of a daily rate.


Valuation and accounting of constant items within an entity – with no third parties involved – are always and everywhere done in units of constant purchasing power in terms of a daily rate under CIPPA. This includes all items in shareholders´ equity, provisions, pensions, salaries, wages, rentals, all other items in the income statement, accounts payable, accounts receivable, all other non- monetary payables, all other non–monetary receivables, etc.


Nicolaas Smith

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