The real values of revaluable fixed assets are not eroded by the stable measuring unit assumption when entities value these items at their original nominal HC values before the date that they are actually sold or exchanged during low inflation and deflation. They would be valued at their current market values on the date of exchange or sale in an open economy. During hyperinflation all non–monetary items (variable and constant real value non–monetary items) are required to be restated in terms of IAS 29 Financial Reporting in Hyperinflationary Economies to make these restated HC or Current Cost period-end financial reports more useful by applying the period-end CPI. A hard currency parallel rate – normally the US Dollar parallel rate – or a Brazilian-style index is applied on a daily basis when a country wishes to stabilize its real economy during hyperinflation.
This is not the case with constant items with real values never maintained constant during low inflation and deflation under the HCA model. The stable measuring unit assumption unknowingly, unintentionally and unnecessarily erodes the real values of constant items never maintained constant at a rate equal to the annual rate of inflation in a low inflationary environment when the HCA model is implemented.
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