ON 3 September 2013, View 3 as stated in Par. 16 and 17 in Agenda Ref 12 correctly confirms for the first time that IAS 29 implements financial capital maintenance in units of constant purchasing power.
17. Accordingly they think that if a financial capital maintenance model defined in a measuring unit current at the reporting date is applied when preparing IFRS financial statements, that model should be the one described in IAS 29."
1 April 1989 IAS 29 authorised requiring the restatement of HC or CC financial statements in terms of the measuring unit current at the end of the reporting period during hyperinflation.
On 16 January 2013 the IASB staff stated:
Par. 10. Under current IFRS, there is no particular guidance on how to prepare financial statements stated in constant purchasing power units."
On 21 January 2013 is sent an email to Hans Hoogervorst, the Chairman of the IASB in which I responded to Par. 10 above as follows:
 Incorrect: IAS 29 contains guidance on how to prepare financial statements in constant purchasing power units: many paragraphs in IAS 29 contain that guidance: they state which are monetary and non-monetary items, according to IAS 29, and how to measure items in units of constant purchasing power at the measuring unit current at the period-end date, but, IAS 29 does not result in “Financial capital maintenance ... in units of constant purchasing power” as defined in the CF, Par. 4.59 (a) because it is only possible to maintain a constant item constant when its constant real value is updated every time the URV-based Daily Index (or USD daily free-market rate) changes during hyperinflation. Values under IAS 29 are not continuously updated every time the URV-based Daily Index changes. The time variable (interval) should be: every time the URV-based Daily Index changes and not every time the monthly CPI changes. If IAS 29 were to be changed as such it would become “Financial capital maintenance ... in units of constant purchasing power” as defined in the Conceptual Framework, Par. 4.59 (a).
So, I informed the IASB for the first time on 21 January 2013.
In April 2013 the IASB issued a Draft Discussion Paper: Capital Maintenance (not available online anymore) in which the IASB stated:
Par. "9.48 The concepts of capital maintenance are used in IAS 29 Financial Reporting in Hyperinflationary Economies."
The IASB did not indicate in April 2013 which concept(s??) of capital maintenance are used in IAS 29.
On 7 June 2013 in my response to the Draft Discussion Paper: Capital Maintenance I informed the IASB again:
"Restatement of HC or CC financial statements in terms of the measuring unit current at the end of the reporting period as prescribed in IAS 29 and implemented in terms of the monthly published CPI is a form of financial capital maintenance in units of constant purchasing power."
Finally, on 3 September the IASB correctly confirmed that financial capital maintenance in units of constant purchasing power is required in IAS 29, 24 years after its authorization on 1 April, 1989.
This was very evident during the last 8 years of Zimbabwe´s hyperinflation - something the IASB steadfastly refuses to admit although it is very clear to all accountants worldwide (except at the IASB) that IAS 29 had absolutely no positive effect in Zimbabwe. IAS 29 was implemented in terms of the monthly published CPI during those 8 years with absolutely no positive effect: the Zimbabwean economy nevertheless imploded on 20 November 2008. If IAS 29 were to have been implemented in terms of a Daily Index, e.g., the Daily US Dollar parallel rate, or the Old Mutual Implied Rate that was available till 19 November 2008 during those 8 years, then the Zimbabwean economy would never have imploded. Various Latin American countries implemented daily indexing or daily monetary correction or daily price level restatement which are all forms of financial capital maintenance in units of constant purchasing power in terms of a Daily Index with great success from 1964 till 1994. Brazil used their daily Unidade Real de Valor combined with their Real Plan to stop hyperinflation in April 1994. Brazil used daily indexation for 30 years from 1964 till 1994. This great Latin American success with daily indexation was ignored with the formulation of IAS 29 in 1989.
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