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Monday, 2 January 2012

Strengths of CIPPA compared to books on Capital Maintenance

Strengths of CIPPA compared to books on Capital Maintenance

1.       CIPPA proves there are three concepts of capital and capital maintenance authorized in IFRS since 1989.

2.       CIPPA splits non-monetary items in variable and constant real value non-monetary items and shows that this split is indirectly defined in IFRS since 1989.

3.       CIPPA proves that it is not inflation but the stable measuring unit assumption eroding companies´ capital and invested profits.

4.       CIPPA proves that financial capital maintenance in nominal monetary units per se is a fallacy during inflation and deflation.

5.       CIPPA proves that financial capital maintenance in units of constant purchasing power in terms of a daily rate at all levels of inflation and deflation automatically maintains the constant purchasing power of capital constant for an indefinite period of time in all entities that at least break even in real value – ceteris paribus.

Strengths of books on Capital Maintenance compared to CIPPA


1.       It is generally accepted that there are only two concepts of capital and capital maintenance, namely, physical and financial.

2.       HCA implements financial capital maintenance in nominal monetary units. The HC paradigm is the generally accepted global paradigm.


Nicolaas Smith

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