IFRS and US GAAP authorised CMUCPP 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) in terms of a Daily CPI in entities that at least break even in real value during low and high inflation, hyperinflation and deflation - ceteris paribus. European Accounting Assoc: "Capital maintenance is a competing objective of financial reporting."
Daily indexation, i.e., Capital Maintenance in Units of Constant Purchasing Power in terms of a Daily Index as authorized in IFRS and US GAAP was the macroeconomic measure that stabilized the Brazilian non-monetary and daily indexed monetary economy during hyperinflation.
Asked to define Twitter someone said:
Twitter is the essential utility we need – which we only realized we needed, once we actually had it.
Daily indexing (CMUCPP) is the FREE essential paradigm change needed in Venezuela.
Official dollarization is very costly AND the country loses independent monetary policy.
Spontaneous dollarization is also “free” but the country will continue to lose independent monetary policy.
Daily indexation (CMUCPP) would stablize an economy AT NO COST at any rate of inflation or deflation.
Daily indexation (CMUCPP) is a paradigm change. It is a macroeconomic measure.
Daily indexation (CMUCPP) stops the Historical Cost paradigm. It stops the stable measuring unit assumption being implemented.
Copyright (c) 2005-2013 Nicolaas J Smith. All rights reserved. No reproduction without permission.