It is generally impossible to maintain the constant purchasing power of capital constant in nominal monetary units during inflation. The statement in IFRS in the Conceptual Framework, par. 4.59 (a) that “Financial capital maintenance can be measured in nominal monetary units” is thus a fallacy. IFRS are thus based on a fallacy which came about through social and economic practice over the last 3000 years. It may take another 200 years to undo that practice.
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