However, there is currently no constant real value capital in the world economy under HCA during low inflation and deflation. The portion of the original real value of all contributions to Shareholders´ Equity in companies covered by revaluable fixed assets is, in fact, treated as a variable real value non-monetary item under HCA during low inflation. This existing constant real non-monetary value is not maintained constant under the HCA model during low inflation and deflation. Its real value depends on the variable real non-monetary value of the fixed assets determined at fair value from time to time in terms of IFRS and US GAAP during low inflation since equity is equal to net assets under HCA with financial capital maintenance measured in nominal monetary units.
Capital will only – for the first time ever during low inflation and deflation - correctly be treated as a constant item and its existing constant value maintained constant in entities that at least break even for an unlimited period of time – ceteris paribus - when financial capital maintenance in units of constant purchasing power as authorized in IFRS in the Conceptual Framework (2010), Par 4.59 (a) is freely chosen by entities. There is no other way during low inflation and deflation.
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