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Thursday, 30 January 2014

IAS 29: The IASB´s FANTASY standard

IAS 29 Financial Reporting in Hyperinflationary Economies had NO POSITIVE EFFECT during the 6 years it was implemented in Zimbabwe´s hyperinflationary economy. It was ABSOLUTELY USELESS during that period.

The IASB refuses to admit that. The IASB first has to conduct a special review to investigate what effect IAS 29 had in Zimbabwe, according to Michael Stewart, the IASB´s Director of Implementation Activities. The rest of the world´s accountants and economists generally accept that it is obvious that IAS 29 had no positive effect since the Zimbabwean economy imploded in 2008 during full implementation of IAS 29.

Not a single member of the International Accounting Standards Board and the IFRIC Interpretations Committee today realizes that or would admit that IAS 29 had no positive effect in Zimbabwe.

At IFRIC Interpretations Committee meetings and all other occasions they freely refer to IAS 29 as a fully effective IFRS. IFRIC members are completely oblivious of the fact that IAS 29 had NO POSITIVE EFFECT in Zimbabwe. 

LISTEN to IFRIC members referring to and quoting IAS 29 as if it were a fully effective IFRS at the 23 September 2013 IFRIC meeting discussing Capital Maintenance in Units of Constant Purchasing Power. IAS 29 was ABSOLUTELY USELESS during the 6 years it was implemented in Zimbabwe´s hyperinflationary economy. 

IFRIC and IASB members make decisions in terms of a 24 year old standard that was ABSOLUTELY INEFFECTIVE during the 6 years it was implemented in Zimbabwe. That is how the IASB and IFRIC operate.

The members of the IFRS Interpretations Committee ignorant of the fact that IAS 29 had NO POSITIVE EFFECT in Zimbabwe are:


Wayne Upton
Chairman, IFRS Interpretations Committee
International Director, IASB
Tony de BellGlobal Accounting Consulting Services Leadership Team
PwC
United Kingdom
30 June 2016
Luca Cencioni
Senior Accounting Manager
Eni Adfin S.p.A.
Italy
30 June 2014
Reinhard DotzlawGlobal IFRS Panel
KPMG
Canada
30 June 2016
Feilong Li
Executive Director, Executive Vice President & CFO
China Oil Services Limited
People's Republic of China
30 June 2016
John O'GradyAsia-Pacific IFRS Leader
Ernst & Young
Australia
30 June 2015
Jean Paré
Vice President, Financial Reporting
Bombardier Inc.
Canada
30 June 2014
Joanna Perry 
Professional Non-Executive Company Director
New Zealand
30 June 2014
Sandra PetersHead of Financial Reporting Policy
CFA Institute
United States
30 June 2015
Charlotte PissaridouHead of Accounting Policy for EMEA (Europe, the Middle East and Africa) and Asia
Goldman Sachs 
United Kingdom
30 June 2014
Laurence Rivat
Partner
Deloitte & Associes (France)
France
30 June 2015
Dr Martin SchloemerAccounting Principles and Policies
Bayer AG
Germany
30 June 2016
Scott A. Taub
Managing Director
Financial Reporting Advisors, LLC
United States
30 June 2014
Andrew WatchmanExecutive Director of International Financial Reporting
Grant Thornton
United Kingdom
30 June 2016
Kazuo YuasaGeneral Manager, Corporate Finance Unit,
Fujitsu Limited
Japan

The members of the IASB ignorant of the fact that IAS 29 had NO POSITIVE EFFECT IN Zimbabwe are:



 
Hans Hoogervorst (Chairman)
Appointed: 1 July 2011
Term expires: 30 June 2016
 
Ian Mackintosh (Vice-Chairman)
Appointed: 1 July 2011
Term expires: 30 June 2016
 
Appointed: 1 August 2007
Second term expires: 31 July 2017
 
Appointed: 1 July 2006
Second term expires: 30 June 2016
Appointed: 1 July 2012
Term expires: 30 June 2017
  
Appointed: 1 May 2004
Second term expires: 30 June 2014
 
Appointed: 1 July 2009
Term expires: 30 June 2014

 
Appointed: 21 February 2013
Term expires: 30 June 2017

 
Appointed 23 May 2013
Term expires: 30 December 2019
 

Appointed from: 1 July 2009
Term expires: 30 June 2014
 
Appointed: 1 July 2009
Term expires: 30 June 2014
 
Term begins: 1 July 2011
Term expires: 30 June 2016
 
Appointed: 1 October 2010
Term expires: 30 June 2015

 
Appointed: 15 November 2012
Term expires: 30 June 2017
  
Chungwoo Suh

Appointed: 1 July 2012
Term expires: 30 June 2017

 
Appointed: 1 July 2007
Second term expires: 30 June 2017





















































































































































The IASB staff are aware of the fact that IAS 29 had no positive effect in Zimbabwe: I confronted Michael Stewart about it during a teleconference on 8 January 2013. He stated the IASB was not able to give an opinion about the effectiveness of IAS 29 in Zimbabwe. According to Stewart the IASB first has to conduct a special review of what happened in Zimbabwe before the IASB can give its opinion about the matter.

The above people appear not to have the simple common sense and judgement to admit that IAS 29 had NO POSITIVE EFFECT in Zimbabwe´s hyperinflationary economy. This is very worrying when the above people are the members of the IFRIC Interpretations Committee and the International Accounting Standards Board. They are highly qualified and very well paid. They are the people entrusted with the task of defining IFRS, BUT they actually live in a fantasy world where IAS 29 - for them - is a fully effective IFRS when it, in fact, was COMPLETELY INEFFECTIVE in Zimbabwe´s hyperinflationary economy.

Michael Stewart very petty-mindedly stopped working with me on this matter when I told him in January 2013 that his statement that "financial reporting has NO EFFECT in the economy" was completely wrong.

We all make mistakes. The IASB, IFRIC and IASB staff are not aware that capital maintenance in units of constant purchasing power - their "restatement" - in terms of the MONTHLY published CPI is a mistake. It has to be Daily Indexing - actually following all changes in the general price level. 

They are too prepotent and thus not open to proof of facts as confirmed by Hans Hoogervorst, the Chairman of the IASB. He informed me that the IASB  requires "flexibility" to do their work. That is: "flexibility" to believe in their fantasy that IAS 29 is a fully effective IFRS when it, in fact, had NO POSITIVE EFFECT in the Zimbabwean hyperinflationary economy.

Nicolaas Smith

See: How to fix IAS 29

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