Objectives of CIPPA

Objectives of CIPPA


The first objective of this book is to undeniably demonstrate that the implementation of the very erosive stable measuring unit assumption (which is based on the fallacy that changes in the purchasing power of the monetary unit of account – money – is not sufficiently important to require financial capital maintenance in units of constant purchasing power during low inflation and deflation) as applied as part of the traditional generally accepted globally implemented HCA model, unnecessarily, unknowingly and unintentionally erodes the real value of existing constant real value non–monetary items never maintained constant, e.g. that portion of shareholders´ equity never maintained constant as a result of insufficient revaluable fixed assets (revalued or not) during low inflation, amounting to hundreds of billions of US Dollars each and every year in the world´s constant item economy because it is freely chosen to measure financial capital maintenance in nominal monetary units (which is a fallacy since it is impossible to maintain the real value of financial capital constant in nominal monetary units per se during inflation and deflation) as authorized in IFRS in the original Framework (1989), Par 104 (a).

The second objective of this book to show that measuring financial capital maintenance in real value maintaining units of constant purchasing power per se during low inflation and deflation (CIPPA) – also authorized in IFRS in the original Framework (1989), Par 104 (a) – which is applicable in the absence of specific IFRS, is the only way to automatically maintain the existing constant real non–monetary value of all existing constant items constant forever in all entities that at least break even whether they own revaluable fixed assets or not – ceteris paribus.


Nicolaas Smith

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