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Monday, 19 May 2008

IAS 29 doubly flawed

It is not only flawed in it´s definition of monetary items as being money held and "items to be received or paid in money" (everything is received or paid in money - both monetary and non-monetary items) but also when it states that Retained Income in the first period of restatement is the balancing figure after restatement of all other balance sheet items.

This is a very serious mistake by the IASB.

Retained Income is a constant real value non-monetary item like Issued Share Capital and should be restated at the daily parallel rate or daily index rate in hyperinflationary economies and at the monthly inflation rate in non-hyperinflationary economies from the date it came about to today´s date.

The book "RealValueAccounting.Com - The next step in our fundamental model of accounting" which is available as a free download from a link on this blog, followed the flawed IASB approach.

This will be corrected in the new book: "Killing the real economy - South African Chartered Accountants unwittingly destroy real value on a massive scale." Unpublished.