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Tuesday, 9 April 2013

Understanding IAS 29 per PricewaterhouseCoopers: Correction 12 and 13: PricewaterhouseCoopers clueless about Capital Maintenance in Units of Constant Purchasing Power


Understanding IAS 29 per PricewaterhouseCoopers: Correction 12 and 13: PricewaterhouseCoopers clueless about Capital Maintenance in Units of Constant Purchasing Power

‘Benefits of purchasing power adjusted financial statements.’

PricewaterhouseCoopers Understanding IAS 29 2006 p4

Correction

What PricewaterhouseCoopers should have stated:

Benefits of Capital Maintenance in Units of Constant Purchasing Power during hyperinflation.

Correction 13

‘Financial statements that are expressed under IAS 29 in a measuring unit that is current at the balance sheet date provide several benefits:’

PricewaterhouseCoopers Understanding IAS 29 2006 p4

PricewaterhouseCoopers and the IASB do not understand that IAS 29 is a failed attempt at implementing Capital Maintenance in Units of Constant Purchasing Power during hyperinflation because

(1)   they do not understand the concept of financial capital maintenance in units of constant purchasing power

(proof: they do not understand

(a) that (and why) a daily index instead of a monthly published index needs to be used and

(b) they do not understand that the IFRS-authorized statement in the Conceptual Framework (2010), Par. 4.59 (a) that ‘Financial capital maintenance can be measured in units of constant purchasing power’ means that non-monetary items are split in two: variable real value non-monetary items and constant real value non-monetary items)

(2) they mistakenly believe that by simply “restating” HC or CC financial statements in a measuring unit that is current at the balance sheet date will stop making these financial statements misleading since that is what they believe is the objective of IAS 29.  They are duped by their blind believe in the meaningless “restatement” dogma. They are clueless about Capital Maintenance in Units of Constant Purchasing Power authorized in IFRS in 1989.


Nicolaas Smith

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