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Wednesday, 3 April 2013


Understanding IAS 29 per PricewaterhouseCoopers: Correction 4: Inflation only affects the real value of only monetary items.

 ‘The impact of inflation is ignored.’ P3

PricewaterhouseCoopers Understanding IAS 29 2006 p3

This should be stated as follows:

The impact of

(a)   inflation and deflation on the real value of only monetary items and

(b)   the implementation of the stable measuring unit assumption on the real value of constant real value non-monetary items during inflation and deflation

is ignored.

PricewaterhouseCoopers, like most people, mistakenly thinks that inflation affects non-monetary items. That is impossible. Inflation only affects the real value of monetary items – nothing else.


Nicolaas Smith

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