Tuesday, 26 January 2010

It is not inflation doing the destroying

The understanding of the difference between the generally accepted accounting practice whereby SA accountants unnecessarily, unknowingly and unintentionally destroy the real values of only existing reported constant items never maintained only in the SA constant item economy with their free choice of implementing their very destructive stable measuring unit assumption during low inflation as authorized by the IASB when it approved the very popular accounting fallacy of financial capital maintenance in nominal monetary units during low inflation in the Framework, Par 104 (a) in 1989 and the destruction by the economic process of inflation of the real value of only money and other monetary items only in the monetary economy is an ongoing process. It has become clear to me, since September 2008, that inflation and hyperinflation only destroy the real value of money and other monetary items. Inflation and hyperinflation only have one – a monetary – component. It is clear to me now that it is not inflation that is causing (or hyperinflation that could cause) the destruction of the SA real economy or the real value of reported constant items never maintained in the SA real economy. It is clear to me now that inflation does not have a non-monetary component.

Copyright © 2005 - 2010 Nicolaas J Smith

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