IFRS and US GAAP authorised CMUCPP maintains the constant purchasing power of constant real value non-monetary items (e.g. capital, all items in shareholders´ equity, provisions, salaries, wages, pensions, taxes, trade debtors/creditors, etc) in terms of a Daily CPI in entities that at least break even in real value during low and high inflation, hyperinflation and deflation - ceteris paribus. European Accounting Assoc: "Capital maintenance is a competing objective of financial reporting."
Financial reporting is accounting and it does affect the economy
reporting is accounting and it does affect the economy
accounting entry eventually is part of the financial reports for the financial
period. To prepare the financial reports in terms of IFRS or US GAAP or
whatever standard at the end of the financial period, an entity´s economic
activities are accounted from the first till the last day of the financial
period. That all ends up finally in the financial report. The measurement bases
used during the reporting period do affect the economy. In principle, it all
boils down to whether you implement the stable measuring unit assumption or
be able to prepare the financial reports at the year-end you have to do the
whole financial year’s accounting: from the beginning to the end. So, all of
accounting is part of financial reporting. It is impossible to do the financial
reports without accounting.
Mosso stated that accounting is a measurement instrument. He could just as well
have stated financial reporting is a measurement instrument. Financial
reporting includes accounting: all accounting entries during the financial year
and the financial reports at the end of the financial period.