IFRS and US GAAP authorised CMUCPP automatically 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) only when updated in terms of the Daily CPI during low and high inflation, hyperinflation and deflation - ceteris paribus. European Accounting Association: "Capital maintenance is a competing objective of financial reporting."
All monetary amountsper se (meaning all values in the
economy) are not expressed in
terms of a relatively stable foreign currency.
All local currency monetary items (local currency bank values, bank statements,
cheques, local currency loans, etc.) are not
expressed in terms of a relatively stable foreign currency. They are expressed
in local currency values.
real value non-monetary items are expressed in terms of a relatively
stable foreign currency.
Copyright (c) 2005-2013 Nicolaas J Smith. All rights reserved. No reproduction without permission.